The £7 million cash pot will be used to encourage companies to take up office space, particularly in the city centre and west Edinburgh.
The practice is common in cities such as Glasgow and Manchester, where firms struggling to afford the final phase of investment are assisted in setting up.
City leaders said there were between 10 and 20 firms keen to make the move to Edinburgh.
George IV Bridge, where there are already plans to overhaul the Central Library, is understood to be of interest to a number of companies.
Frank Ross, the city’s economy leader, said: “Many companies are struggling to access bank loans and may need that final push to make the move, which would in turn provide new jobs and benefit the local economy.”
Cllr Ross also said that by supporting small and medium-sized businesses in Edinburgh the city council will hit its target of 20,000 new jobs by 2017.