There is particular attention on supplying the money to areas which otherwise may not receive the kind of investment necessary to grow new businesses. The government is also hoping the influx of money will loosen certain regions reliance upon the public sector to provide employment and infrastructure.
On November 10, in a speech on how the UK can motivate its economy, David Cameron said: "I've lost count of the number of times people working in our small businesses have told me they just can't get a loan for that new investment, that new clean room or that extension to their business. We also need to be supporting the person who wants to start that small internet trading firm from their home."
With this in mind, the Prime Minister and Lord Heseltine have agreed a deal with RBS, NatWest and HSBC which requires these banks to administer the scheme and provide the lending. Despite their involvement, it has been made clear the banks will not be benefiting financially from this arrangement.
The fund previously stood at £1.4 billion and the extra money will be well received as the bids for the fund in the second round greatly exceeded what was available. A third round of bidding will now occur for small businesses wishing to take advantage of the opportunity.
For more information on the Regional Growth Fund, click here