Grants of up to £5,000 will be offered through the £23 million Local Investment Fund to more than 4,000 new or small enterprises.

The awards will be used to meet up to 40 per cent of the cost of capital spending, such as extending premises or buying new equipment.

According to the Welsh Assembly, the scheme will create a total investment of around £54 million in Wales and generate up to 3,000 new jobs.

The new fund will support small firms in 15 of the country’s local authorities and builds on the similar South West Wales Flexible Business Finance Scheme.

Deputy first minister Ieuan Wyn Jones, who is also minister for the economy and transport, says the development shows the government’s commitment to supporting entrepreneurs and small firms.

Last month, the £150 million Finance Wales fund was launched to make investments in firms which are looking to expand.