Credit starved entrepreneurs have been eagerly awaiting the move, particularly since the Government's recent stream of initiatives aimed at building a larger start-up community in Britain.
The funding is part of £1 billion in new finance which will be allocated in order to boost lending to small companies who are struggling to grow.
An added bonus of the Business Bank is that the money provided by the Government will be matched by private sector backers, opening doors for mentoring and guidance from successful business owners.
"Today's £300m boost shows we are serious about increasing competition and diversity in the business lending market," said Vince Cable. "Establishing a lasting business bank institution is a long-term project, but getting this money reaching SMEs as soon as possible is the first step."
The Business Bank is predicted to be fully operational by next year.
"For the Business Bank to be a game-changer, it urgently requires both vision and scale," commented Adam Marshall, director of policy at the British Chambers of Commerce. "We urge ministers and the Bank of England to 'think bigger' and ensure the bank can work directly with dynamic new and growing companies as soon as possible, and for the long term."
Following on from the Government's red tape slashing Freedom Day and the appointment of two resident entrepreneurs, it certainly feels as though there's been a shift in the coalition's focus towards SMEs. Something we are, of course, happy to support.