A PAYDAY lender is breaking into business finance and offering struggling firms loans of up to £10,000 in as little as 15 minutes.

Wonga.com said its entry into the business market will help those companies waiting for longer-term funding and payment of key invoices.

It will charge an interest rate of between 0.3% and 2% per week.

The development comes as firms find it increasingly difficult to secure access to short-term loans and overdrafts.

The Bank of England reported earlier this year a number of banks have set a minimum business loan of £25,000, with smaller firms typically relying on advances from wealthy individuals and their business peers.

The expansion in Wonga's services illustrates the latest growth in a short-term loans sector that has mushroomed since the arrival of the non-conventional high-street lenders.

However, the industry as been accused of preying on those in financial trouble, prompting the Office of Fair Trading to investigate whether some firms deliberately target people unsuitable for credit and offer rolling loans to those unable to meet their borrowing commitments.

Payday lenders say customers are happy with a service that fills a gap in the market.

Colin Borland, of the Federation of Small Businesses Scotland, said members should think carefully about taking out a high-interest loan, but added the real issue was the lack of business overdrafts now on offer to firms seeking flexible finance.