Housing Minister Brandon Lewis said that the new Housing Growth Partnership would help to deliver an extra 2,000 homes.
Half the cash will come from the Government to match the £50m already pledged by Lloyds Banking Group in October to “keep the country building”.
The Housing Growth Partnership is expected to make around 50 investments alongside small builders in new developments.
It will also establish a network of builders, including experienced developers, who will act as mentors and advisers to those looking to expand and grow their businesses.
Developments worth between £750,000-£12m will be eligible for investments from £500,000-£5m for each project.
During the last 25 years, the number of firms building between 1 and 100 homes a year has fallen from over 12,000 to fewer than 3,000.
Lewis said: “The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 – seven years on, companies are getting back on their feet but we’re determined to give them all the help they need.
“Access to finance is one of the biggest challenges they face – so that’s why today I’m launching this £100m commitment which will help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes.”
Andrew Bester, Group Director and Chief Executive, Commercial Banking, Lloyds Banking Group said the HGP funding would provide house builders with much needed equity to support residential development projects, stimulate growth in their businesses and facilitate access to conventional property development finance.