"Everyone knows Britain's small firms are struggling to get credit and banks are weak," said the Chancellor. "So, as part of my determination to get the economy moving, I have set the Treasury to work on ways to inject money directly into parts of the economy that need it, such as small businesses."
He added: "It could help prevent another credit crunch, provide a real boost to British business and over time help solve that age old problem in Britain - not enough long-term investment in small business and enterprise."
This move could also encourage the development of a more effective market in small business bonds, of the kind which already operates in the US. And the policy will not add to the state deficit, the Treasury insisted, because the Government will be obtaining assets in return for its investment.
The new scheme will be potentially overseen by the Bank of England or by a new "arm's length body" so ministers will not be directly involved in "picking winners".
But how easy will this new bank of funding be to access in practice? And what contingency plans are in place in case of business failure or bad debts? More will be revealed in November, says government.
At the same conference, Osborne also announced changes to employment law. Henceforward, anyone applying to make a claim at an employment tribunal will have to pay a fee of between £100 and £150. A full-scale hearing will now cost £1,000. Any claim for more than £30,000 in compensation could cost considerably more.
Osborne said: "We respect the right of those who have spent their whole lives building a small business not to see that achievement destroyed by a vexatious appeal to an employment tribunal."