The business loan project, called Finance Cornwall, concentrates on businesses which are not able to get funding from other sources.

The loans are aimed at boosting the county's ailing economy.

Businesses can apply for loans of up to £500,000.

The money is also being used for training

The majority of the money comes from the European funding programme, called Objective One, with support from Barclay's Bank and Cornwall County Council.

However, not many companies are taking advantage of the cash as yet.

But businesses have said the money can make a difference.

David Wyatt has worked in the car industry for more than 15 years and used to own a small garage near Gunnislake before making the decision to expand to Saltash.

As a small business, many banks were unwilling to lend him the money so he turned to Finance Cornwall, who lent him £20,000.

Funding aid

Mr Wyatt said: "Now I've got the money, not only have I maintained two jobs, I've actually employed two people. So, I've now got four employees, other than just myself as one.

"If I hadn't had Finance Cornwall to support me then I wouldn't have taken on this venture."

Business loan fund manager Jeff Lenihan said: "It will enable projects to happen that would have otherwise not have happened.

"They've not had the opportunity to get this funding because the banks and building societies have said 'We can't help with all of this'.

"With this fund, what we're going to do is make the difference in terms of businesses being able to get a plan off the ground."