THE £100-million-plus loan fund for small businesses set up as part of the Scottish Government's Scottish Investment Bank (SIB) initiative has taken a big stride forward after lending nearly four times more money in its second year than its first.

The news will come as a relief to the Government and Scottish Enterprise (SE) following a long period of teething troubles for the Scottish Loan Fund (SLF).

The Government had originally intended it to have £150 million and be managed by SE as part of a total £300m lending capability to be collectively known as the SIB. However, a combination of EU regulations and private-investor pressure meant that it launched in 2011 under the management of Maven Capital Partners with £94m of public-private money.

During its first year, the SLF loaned just £6m as potential borrowers reputedly baulked at the terms. including what is known as mezzanine debt, which accepts a lower place in the pecking order of a company's creditors in exchange for higher lending rates.

During the SLF's second year, which ends next month, it has loaned £17m to six companies and three more deals in the pipeline – East Kilbride-based Merson Signs and Aberdeen oil and gas support companies Rovop and Fletcher Shipping – are expected to make that £22m by the end of March.