Firms planning a capital project have been offered a cashback deal if they take out a loan with Barclays.

The bank has released £150 million in new funding for small and medium enterprises (SMEs) through the European Investment Bank (EIB) Loan Support Scheme, which includes a 2.5 per upfront cashback payment when the loan is drawn.

The scheme is an EIB initiative that enables eligible businesses investing in capital projects to secure loans through the scheme. The cost of borrowing is reduced by the one-off cashback payment.

The scheme is offered to businesses investing in capital projects costing between £5,000 and £22 million, with fewer than 250 employees.

Dan Roberts, head of debt products at Barclays Corporate, said: "The benefit of this scheme is immediate, the cashback payment gives customers an extra helping hand in today's challenging economic environment."

Roberts said the EIB loan was another key way in which Barclays is partnering with the UK and European Governments to offer support to SMEs.

"We are well aware of the responsibility of banks in the current environment, and have developed a wide range of initiatives, both in partnership with Government and on our own, which assist businesses in challenging times."

Barclays added that it had allocated £100 million to date in new loans to more than 1,200 clients through the Enterprise Finance Guarantee scheme.