We will seek to work actively with small firms who show promised of growth to steer them towards the kind of finance that will suit them best

Colin Mitten, Finance Wales

The money will top up the �35m already at the dispotal of Finance Wales for assisting small and medium-size firms.

It will make the organisation one of the main channels for the delivery of Objective One funds in Wales.

Altogether, more than �1.2bn of EU money is being provided over seven years to aid the regeneration of the economic blackspots of west Wales, the south Wales Valleys and pockets of north Wales.

With the continued retraction of the major manufacturing industries, taking away thousands of jobs in Wales, home grown industry is being seen as having a key role to play.

The Welsh Assembly had been under fire from business leaders for not fully involving the private sector in the various schemes and initiatives the EU project has generated.

Now, however, Finance Wales will now be able to increase its activities offering small businesses loans from �1,000 up to �750.000

First Minister Rhodri Morgan: Key role

"Our own home-grown companies will play a key role in the development of the Welsh economy in the coming years," said First Minister Rhodri Morgan.

"In the past, lack of capital for expansion has often been cited as the reason why small companies have not flourished in Wales.

"One of the assembly's first decisions was that Wales needed this kind of development fund to back our small and medium enterprises and so I am delighted that Finance Wales is taking shape so effectively to ensure that Welsh entrepreneurs can build successful businesses in Wales."

Set up two years ago, Finance Wales will now expand its range of activities.

It plans to invest in 4,000 new or expanding ventures, offering management expertise as well as cash help.

Chief Executive Colin Mitten said the strengthened Finance Wales would be "flexible, pragmatic, non-bureaucratic - and always ready to go the extra mile to help any viable venture to succeed".

Debt finance

It would strive to provide a 'one stop shop' for small businesses needing finance, he said.

"We will seek to work actively with small firms who show promised of growth to steer them towards the kind of finance that will suit them best."

Barclays' Regional Corporate Director for Wales and South West Geraint Jones said that the fund would meet a clearly defined need in Wales for debt finance for small and medium-sized businesses.

"Working with the European Commission and Finance Wales make it possible for us to provide finance on a positive, commercial basis," he said.