The first phase of the government’s £1bn small business bank has been launched.

First announced last September by business secretary Vince Cable, the bank is designed to “help many small and medium-sized companies who have struggled for credit since the financial crisis”.

Operating through existing financial channels, this first phase will see £300m of the £1bn allocated by the government - alongside money from private investors - made available to lenders in an effort to create more finance options for small and medium-sized businesses.

It is hoped that transactions will start taking place by this autumn with a formal business bank institution operational in 2014.

“Small and medium-sized businesses are still telling me that access to finance is their number one problem, preventing them from investing and growing,” said Cable. “Establishing a lasting business bank institution is a long-term project but getting this money to SMEs as soon as possible is the first step.”

Alex Jackman, head of policy at the Forum of Private Business, welcomed the news but urged the government to allocate the money quickly.

“Potentially some of this money can go out the door very quickly if proper proposals are submitted,” he said. “There’s no doubt  the money is desperately needed in the economy right now, so we urge the government to get the cash out to where it’s needed most, by working with organisations to ensure bids are successful. We certainly don’t want to be seeing any of this money sitting untouched come February next year.”