The Government has made €500m in funds available as part of a new long-term small business lending scheme after signing an agreement with the European Investment Fund.

The Growth and Sustainability Loan Scheme will provide discounted loans of up to €3m to SMEs, including farmers, for business expansion and investment in energy efficiency and sustainability.

The fund, which is being pitched as a successor to the successful Future Growth Loan Scheme, offers finance for up to 10 years with unsecured loans of up to €500,000 – terms difficult to get from non-state lenders.

At least 30pc of the loans will be targeted at spending in support of the climate change agenda, according to the Department of Enterprise.

The Growth and Sustainability Loan Scheme will enable businesses to invest in sustainability, innovation and further expansion through longer-term investments, using low-cost, longer-term and more accessible funding.

The new funding source is being pushed to farmers, fishers and businesses for strategic investment.