Chancellor Rachel Reeves has unveiled a £500m strategy to aid smaller businesses impacted by US President Donald Trump's tariffs.

Administered by the British Business Bank, the Growth Guarantee Scheme will now offer increased lending capacity for companies requiring assistance with cash flow issues due to tariff alterations, as reported by City AM.

The scheme, which lends up to £2m per business group, has so far distributed £2.1bn across 13,447 firms, with 70% of each loan backed by a government guarantee.

Earlier this month, Trump introduced comprehensive tariffs affecting all nations, causing financial markets to spiral amid concerns of a significant deceleration in global economic growth.

Since the announcement, the FTSE 100 has plummeted by 7.5%, while the domestically-focused FTSE 250 has fallen by 5.8%.

Although the president has since imposed a 90-day hold on the most extreme tariffs, the UK is still subject to a 10% tariff on any goods exported to the US. Additionally, his hefty 145% tariffs on China could potentially impact British businesses exporting Chinese-manufactured products to the country.

In last year's Autumn Budget, Reeves committed over £1bn in funding for the British Business Bank to extend its programmes throughout the following year.

Other initiatives managed by the bank include additional support for smaller housebuilders, funding for start-up loans, and programmes aiding innovative, high-growth businesses such as those in the life sciences sector.

Reinald de Monchy, co-chief banking officer of the British Business Bank, commented: "The Growth Guarantee Scheme and its predecessors have proven themselves to be an important means of supporting smaller UK businesses over the last forty years."