The government said the £100m in cash, delivered through a 50/50 public private partnership between Lloyds Banking Group and the government, is aimed to provide money to support small business, help get workers onto sites and increase housing supply.
The scheme will be used to help SME builders with up to 100 completions to their names a year to invest in new projects and develop their businesses.
The partnership expects to make around 50 investments and aims to provide an additional 2,000 homes.
In the last 25 years, the number of firms building between 1 and 100 units a year has fallen from over 12,000 to fewer than 3,000, according to government figures.
Both starts and completions have risen in the past year and the number of homes granted planning permission is at the highest annual total for eight years, but from a very low base.
Housing Minister Brandon Lewis said: “The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 – seven years on, companies are getting back on their feet but we’re determined to give them all the help they need.”
Andrew Bester, group director and chief executive, commercial banking, Lloyds Banking Group said: “It will provide SME house builders with much needed equity to support residential development projects, to stimulate growth in their businesses and facilitate access to conventional property development finance.”
In May, a NatWest Intermediary Solutions survey of 500 brokers showed more than half of brokers were optimistic about the new build sector, with just 25% expecting less business to come from new developments.
