Advantage West Midlands is launching a fresh initiative to improve SME access to loan finance.
It involves sums of up to £ 50 , 000 for existing privately-owned small businesses, social enterprises and those looking to start up.
The £3.7 million Advantage Small Loan Programme, which is supported by funding from the European Regional Development Fund, will offer grants to community development finance institutions and other non-profit bodies to enable them to increase their lending. It runs until December 31, 2008.
Patrick Palmer, head of access to finance at AWM, said: "By adopting different criteria, these lenders are able to provide loans to those with credible business plans yet which still find themselves unable to obtain some or all of the finance from conventional sources."
Lending organisations have been invited to submit expressions of interest.
Mike Watts, a business finance executive at the Agency, said: "A number of these lenders already operate in the region, but geographical coverage is patchy.
"We also recognise that the scope and scale of their lending is not large enough to make a significant impact on our most under-invested communities. I look forward to receiving proposals that show how, with support from this programme, they plan to address this."
Lenders recently formed a consortium known as Community Development Finance - West Midlands to ensure finance activity in the region is coordinated.