The East Midlands Development Agency (EMDA) will offer loans on a commercial basis to small and medium-sized enterprises in order to help address the lack of credit from banks and other traditional sources.

Providing finance of between £50,000 and £250,000 for up to the three years, the East Midlands Transition Loan Fund is available to companies which have been operating for at least six months and can demonstrate good management and business plans.

The EMDA claims the initiative will provide a short-term and immediate solution to firms which are having difficulty obtaining money for investment, with it designed to complement the government’s £21 billion loan guarantee programme.

Jeff Moore, chief executive of regional development agency, comments: ‘The introduction of this fund means that viable businesses now have the opportunity to obtain the working capital they need to sustain and develop their activities during the current economic downturn.’

Last month, the EMDA revealed the EnterpriseLoans East Midlands scheme, which provides finance to entrepreneurs, awarded £282,000 to 22 applicants in its first six months.