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The funding from EIB will enable the Bank of Scotland to provide lending facilities to its customers at a discount of up to 80 basis points compared with standard rates.

The Bank is now working with the EIB to define the terms and conditions of how this funding will be made available to its SME customers.

In the meantime, the bank has also drawn up a range of other measures to help its small business customers.

These include guaranteeing pricing on its small business customer overdrafts for 12 months from the date of arrangement for new loans and renewals.

It has also pledged to immediately pass on any interest rate cuts to small business customers.

In 2009, the bank will also launch a helpline to give consumers with concerns about their banking facilities access to senior level staff.

And on 8 December the bank will publish a series of guides to help small businesses manager their cash flow.

Commenting, Adrian Grace, managing director of Bank of Scotland Commercial, said: "We understand the financial pressures that they are facing during these difficult economic times.

"That is precisely why we have launched this package of measures - to provide both financial assistance and, equally importantly, some reassurance that the Bank is committed to supporting small business throughout the UK.

"We are confident that these measures will make a real difference to our small business customers."