A founder of one of Scotland's most successful fund management firms, Lindsay Whitelaw, had a disconcerting reaction when he set out to raise funding for a new venture recently.

"Everybody thought it was an excellent idea," recalls Mr Whitelaw before adding with a wry smile: "Not everybody wanted to be first. There was a race to be second."

Months after approaching select institutions for backing for a firm he believes can help ease the well-documented cash-flow concerns of the UK's small and medium sized enterprises, Mr Whitelaw can afford to be philosophical about the initial response.

After persuading RSA to stick its neck out Mr Whitelaw's Urica won a crucial £10 million in funding from the giant insurer.

Soon after, the UK Government pledged £10m for Urica under plans to develop alternative sources of finance for the country's SMEs.

The commitments have provided Urica with the wherewithal to test the 55-year-old Mr Whitelaw's belief it has developed a product that could provide help for SMEs and a valuable new asset class for institutions to boot.

Following repeated claims the country's banks have been failing to support SMEs, Urica has adopted an innovative response.

"There's lots of talk as to why the banks aren't lending to SMEs.

"The banks are saying they're offering money but people don't want it and a number of Government solutions that have been developed have been around Funding for Lending and other similar schemes.

"I think one of the fundamental problems with them is all of these solutions are providing more debt to already indebted businesses that actually don't want to take on debt.

"Their priority is to find a way to deleverage their balance sheets and reduce debt.

The Edinburgh-born chartered accountant adds: "One of the key things that attracted us to the Urica business model is that we are supplying cash not debt to the smallest businesses in the economy."

The company has been founded to provide finance for firms that supply the kind of SMEs that will power growth in the UK.

It will pay invoices submitted to selected companies by the suppliers they nominate after 14 days in return for a 2% settlement discount. Urica will recover the full invoice amount from the companies the suppliers work for after 60 days.

The service is intended to tackle one of the key problems faced by SMEs amid the current uncertainty about the economy.

Mr Whitelaw said: "Businesses that can have drawn cash onto their balance sheets via extended credit terms. The problem with that is by the time you get to the smaller companies in the UK they're having to give extended credit to their customers but they're not able to enjoy extended credit from anyone they deal with. So the smallest businesses act as bankers to the larger businesses and that's a very difficult place to be."

Mr Whitelaw believes that by providing cash to companies that supply firms with growth potential Urica can remove one of the biggest obstacles to their expansion.

He is motivated by the belief SMEs play a key part in the UK economy.

He said: "The SME in the UK and Scottish economy is extremely important, it's over 50% of UK GDP and over 60% of private sector employment. So if the SMEs have a problem the economy has a problem and they do have a problem at the moment."

Mr Whitelaw says the terms Urica works on are very fair. It levies no charges, besides the 2% settlement discount, and does not require personal guarantees from the directors of companies concerned. The firm launched the product in Scotland in May in the belief the country has many good businesses in areas like engineering whose growth could be hampered by problems in the supply chain.

He said: "There's a lot of very good businesses in Scotland and that I think sometimes gets lost in the noise a bit, but these companies are strong, they've weathered the challenges well and they're extremely well positioned for growth."

After more than 20 years in the investment industry, Mr Whitelaw has developed a sophisticated knowledge of the corporate landscape in Scotland. One of a gang of four fund managers who left Ivory and Sime to launch Artemis, he has played an important role in developing a firm that has become a huge success.

Started in a small rented office on Edinburgh's St Colme Street with John Dodd, Mark Tyndall and Derek Stuart in 1997, Artemis quickly made a name for itself. ABN Amro acquired a 58% stake in 2003 and bolted on its unit trusts business in a deal that left the founders reportedly sitting on a paper fortune of several million pounds each.

Artemis manages around £15 billion in funds from offices in Edinburgh and London and Mr Whitelaw divides his time between both cities.

One of the areas in which Artemis made its name was in backing growth firms. After qualifying as a chartered accountant, Mr Whitelaw worked at Johnston Press before learning about the development capital business at the 3i private equity operation's old Scottish wing. He honed his skills at Ivory and Sime, when the Edinburgh fund management firm was in its pomp.

Other former luminaries include the founders of Walter Scott and Partners, Newton Investment Management and Aberforth Partners.

"There was a lot of charismatic, smart people that worked for Ivory and Sime. The challenge for every management team was to keep all the talent under one roof," says Mr Whitelaw.

He adds: "In the case of the four of us leaving to start Artemis the primary driver was just a positive one, which was to go out and see what we could do and a feeling that if we didn't have a go we would never know."

Mr Whitelaw developed Urica with Ian Fitz-Harris, who ran the Euro Sales Finance invoice discounting business he backed in his Ivory days.

The two men spent around 18 months turning the idea for Urica into a reality.

This involved combining sophisticated credit checking software with a specially developed front end interface to link with customers and suppliers. The founders invested several hundred thousand pounds in the firm.

Mr Whitelaw praises Artemis for allowing him to devote the time needed to get Urica off the ground.

While he has stopped managing funds, Mr Whitelaw is still a partner in Artemis and chairs the charitable foundation he says is an important part of the ethos of the company.

He believes there is a bright future for Artemis. Partners have stakes in the firm with a majority economic interest acquired by America's Affiliated Managers Group following the 2008 carve-up of ABN Amro.

With high hopes for Urica, the father of four has been pleased by the response so far. A number of the firms contacted have expressed an interest in participating.

The team is already considering rolling the formula out south of the Border this year. The midlands and Manchester areas look like potentially fertile ground.

Mr Whitelaw said: "We can scale up without a proportionate scaling up of the number of people."

He is confident more institutions will sign up. Providers of funding would be in line to make 2% gross on funds extended for 46 days. Urica could recycle funds several times a year.

But, the money man insists: "I'm not embarrassed if it's profitable but the primary focus is not the money, the primary focus is to get it established in the SME armoury as it can play a big part in boosting confidence.

"I'm not doing this for the money. This is because I'm passionate that there's a missing product in the UK.

"For whatever reason Ian and I found ourselves with a solution two years ago, the whole point of this is to turn that into a reality."