The funding will provide the lender with facilities to support SMEs in the West Midlands which are unable to access commercial finance.

The SME lender is also in advanced negotiations with a bank to raise a further £7.5m, bringing the total funding to £15m.

Stephen Deakin, finance director at BCRS Business Loans (pictured above), said the facility was not only great news for the lender, but also for SMEs in the West Midlands looking to grow.

“Alongside the Midlands Engine Investment Fund, this fund will enable us to achieve ambitious growth plans, which will enable us to increase our lending by 25% per annum for the next five years.

“The aims of this fund are very much aligned with our vision at BCRS Business Loans, which is to ensure that no viable business in the West Midlands goes unsupported.

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“The fund is the culmination of over three years’ hard work and is a really exciting proof of concept fund that we hope to replicate a number of times to enable BCRS to leverage significant capital for lending.”

The CIEF was established by Big Society Capital and is managed by Social Investment Scotland.

Alastair Davis, chief executive at Social Investment Scotland, said it was delighted to be managing the CIEF and had enjoyed working with the team at BCRS in bringing this fund to the market.

“In addition, both organisations are excited to be working with Sheffield Hallam University in a long-term research project measuring the impact of this fund in how it can benefit traditionally underserved areas.”

BCRS supports West Midlands-based SMEs by providing business loans ranging from £10,000 to £150,000.