Startup businesses in Scotland have been promised access to a brand new type of funding following the creation of a multi-million pound partnership aimed at helping new firms north of the border.

The Angel Partnership Fund is a £4 million project launched by Bank of Scotland (BoS) and the Scottish Enterprise Co-Investment Fun (SCF) to provide investment in fledgling businesses.

The fund will invest in startups alongside business angels, a strategy which BoS claimed will encourage increased investment from Scotland’s “growing” business angel community.

The SCF said that it will match the bank’s investment in each new business, with £2 million being set aside for startups over the first three years of the fund.

The fund will make investments through ordinary equity share capita, although organisers confirmed that “alternative structures” will be used where appropriate.

The creation of the fund is BoS’ latest attempt to break the market dominance the ‘big four’ banks -Barclays, HSBC, Natwest and Lloyds TSB – enjoy in providing services to small businesses.

As well as offering a special account to small firms that is normally only available to larger companies, BoS has also promised to beat the standard business deposit rates offered by the big four.

Stewart Rogerson, startups director at BoS, said that one of the key objectives of the fund was to encourage new angels to participate in investment opportunities in up-and-coming Scottish businesses.

“The Bank is aware that there is currently a lack of investment at this end of the growth small business market, and this innovative fund is designed to stimulate the considerable amount of business angel finance available in Scotland,” he said.

Gerard Kelly, the director of investment at SCF, said that he was delighted to be working closely with Bank of Scotland through the fund.

“We now have a portfolio of partners who have expertise across a range of different sectors all offering valuable early stage funding that wasn’t previously available.

To find out more about the fund, call 07919 216 979 or visit www.bankofscotland.co.uk/