Details of the business finance taskforce, designed to examine and tackle the challenges facing businesses in diversifying their finances, have been revealed.

The taskforce, announced as part of the credit easing package in the Autumn Statement, will be led by Tim Breedon, Legal and General chief executive, and current chairman of the Association of British Insurers. The focus will be on debt and credit products, looking at a range of finance options to make business's lives easier.

Commenting, Business Secretary Vince Cable said: "Businesses across the UK are still in many cases unhappy with the way they have been treated by banks.

"We have secured a rise in new lending from the biggest banks this year and credit easing is designed to provide another immediate boost. But I want to see as much competition in the market as possible and for businesses to have access to a wide range of finance sources.

"There are exciting innovations emerging that provide alternatives to bank lending. Businesses are selling bonds directly to their customers, missing out the middle-men. And peer-to-peer lending has opened up opportunities for savers to invest directly in the fortunes of UK businesses. I want to investigate and dismantle any barriers to these and future innovations."

Welcoming the move, CBI director general John Cridland said: "Government has grasped the nettle in supporting industry to develop new and viable financing solutions for small and medium sized companies. There is huge growth potential in the UK's medium sized businesses, ready to be unlocked if we can provide them with long term capital to support their investment.

"The taskforce initiative is something that the CBI has specifically called for and it is an opportunity to tackle the barriers that prevent most mid-sized businesses from looking beyond their bank for financial support.

"The current constraints on bank lending mean there is an urgent need to find alternative sources of capital suitable for growing businesses."