Business Secretary Vince Cable will announce plans today to provide £1 billion in funding for businesses loans aimed at SMEs.

The fund will help to establish a business bank, tasked with helping struggling small and medium business, which have faced difficulty in securing loans from other high street banks.

Vince Cable said yesterday: "The government understands the frustration felt by many small- and medium-sized businesses around securing credit, especially from the big four retail banks. Many new, promising, growing companies simply can't get the loans they need to expand on reasonable terms.