Business secretary Vince Cable has announced that £110m of funding for small businesses struggling to access credit is to be made available under the Business Finance Partnership (BFP).

The scheme has seen £55m of government money pledged, which will all be matched by funding from the private sector. A further £45m is due to be made available in the New Year.

Monies have been allocated to four lending and fund management firms: Boost & Co, Credit Asset Management, Funding Circle and Zopa, with due diligence on the allocation of the other £45m nearly complete.

In total, there is £1.2bn of funding available for businesses of all size, each allocated for awarding to certain types of companies.

Cable comments: “Small and medium-sized businesses need access to a diverse range of finance options, including non-bank lending. These new forms of finance are still small in scale today but they should, over time, bring additional choice and greater competition to the lending market.”

According to the Department of Business, Innovation and Skills, the BFP is part of a larger programme of credit easing measures announced in the Autumn Statement 2011 to support smaller and mid-sized businesses that do not have ready access to capital markets.