Philip Hammond, the UK Chancellor of the Exchequer has committed an extra £400m into venture capital funds through the British Business Bank in the Autumn Statement.

According to Hammond, the move would unlock £1bn of new finance for growing firms.

The move was welcomed by independent broker Midlands Asset Finance, which said it would help brake drown barriers to funding.

Midlands Asset Finance director Dave Chapman said: “Anything which can be done to make it easier for small but growing businesses to access the finance they need to invest and grow has to be a good thing.

 “The Chancellor had a golden opportunity today to look at the success of the asset finance market over the past three years and implement measures which make it easier for businesses to identify and source funding opportunities, and also to encourage lenders to release the cash to businesses which have a clear and robust proposition that will result in their growth.”    

It was also welcomed by Carl D’Ammassa, group managing director of business finance at Aldermore, however he warned that it was important investment wasn’t too concentrated in London.

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He said: “It is paramount that other initiatives, including infrastructure investment and the £400m commitment for innovative businesses, are spread evenly around the country to provide greater balance to the UK economy.  We hope to see the government’s continued commitment not only to the ‘Northern Powerhouse’ and ‘Midlands Engine’, but more widely throughout the UK.”

Hammond also recognised this in his speech, saying “London is one of the highest-productivity cities in the world and we should celebrate that fact. But no other major developed economy has such a gap between the productivity of its capital city and its 2nd and 3rd cities.

“So we must drive up the performance of our regional cities.”

As a result, he allocated £556 million to Local Enterprise Partnerships (LEPs) in the North of England, £542 million to the Midlands and East of England, and £683 million to LEPs in the South West, South East and London.