In a UK first, Barclays is launching a new £100m fund to help fast growing technology businesses accelerate to the next level.

The new drive will see the bank backing some of the most innovative UK technology businesses with lending of up to £5m, repayable over three years.

Until now, this type of lending has not been widely available to UK businesses, whereas their US counterparts have been able to grow rapidly through access to debt finance.

Because fast-growing technology firms develop much more rapidly than the 15 year average of traditional businesses, they stand to benefit from new access to debt finance, as an alternative to selling equity. This will also allow leading entrepreneurs to retain control of their company’s development and concentrate on accelerated growth.

A recent report by Barclays showed that UK technology businesses are expected to grow four times faster than GDP in 2015.

Launching the new fund during a visit to high-growth technology firms in Cambridge, Ashok Vaswani, Chief Executive of Barclays Personal and Corporate Banking, said: “This new fund offers a welcome boost to growing UK technology firms, and will provide a catalyst for their development into larger companies. It is part of our plans to deliver the kind of pro-growth financial backing for UK business that US firms already enjoy.

“We identified a significant gap in the traditional way technology businesses were financed, and with this new drive we will be truly able to support businesses right from their inception, to becoming major global players.

“Entrepreneurs and SMEs are the life blood of the UK economy and the technology sector is an incredible incubator for many of these talented individuals and businesses. The rapid growth we’ve seen in the UK rivals the activity and dynamism of Silicon Valley with record levels of investment from the US into London-based technology firms in particular.”

Sean Duffy, Managing Director, Barclays’ Technology, Media and Telecoms team, said: “Fast-growth technology companies in the US have long been able to access debt finance early in the life cycle, and some of the most successful US technology firms, including Facebook and Google, have grown their businesses with help from this type of funding.

“We believe it is important for fast-growth technology companies in the UK to be able to access a similar range of financing solutions, including early-stage debt funding, which together with existing equity investment can provide businesses with a more efficient capital structure. “As the first bank to introduce a dedicated Technology, Media and Telecoms team we understand the complexity and competitiveness of this rapidly evolving sector and believe this fund is another example of how we are continually innovating to support technology companies”.