The funding is based on an initiative from the European Investment Bank (EIB) which provides an upfront “cashback” payment of 2.5 per cent of each loan to offset the cost of borrowing. In the case of the Barclays scheme, this payment will be passed directly to the SME, subject to conditions.

Dan Roberts, head of debt products at Barclays Corporate, claims, ‘The benefit of this scheme is immediate: the cashback payment gives customers an extra helping hand in today’s challenging economic environment.’

The scheme is available to SMEs undertaking a capital investment project costing at least £5,000 and not more than £22 million.

Barclays says it has already allocated £100 million in new loans to 1,200 businesses through the government’s Enterprise Finance Guarantee scheme.