The Scottish Growth Scheme was described by First Minister Nicola Sturgeon as a “half billion pound vote of confidence in Scottish business” when she announced the launch of the initiative in 2016.
However, the SGS, which is expected to use public sector investment to leverage the private sector to help businesses grow, faced criticism when it was revealed that wasn't set up until June 2017, and as a result hadn't paid out any money to support Scottish business.
Now, in a letter to Holyrood's economy committee, the Finance Secretary Derek Mackay has revealed that since then, just £40m has been drawn from the fund.
MSPs on the committee had asked Mr Mackay for an update on the SGS as part of its work on budget scrutiny.
The letter states that as of August 31, a total of £149.5m public and private investment has been made in 233 companies - an amount made up of £39.8m investment from the public sector and £109.7m from the private sector.
The public sector investment consists of £24.1m through Scottish Enterprise, £12.2m in European funding and £3.5m direct from the Scottish Government.
Yet, two years ago the Scottish Government said that the "first tranche of investment" would "provide an estimated £200 million for businesses who are typically seeking equity investment of £2 million upwards."
Today Scottish Labour's economy committee member Jackie Baillie said: “This is yet another SNP scheme that has proven to be an exercise in government spin rather than substance.
“Scotland’s economy is stuttering on the edge of recession but the SNP continue to mismanage investment.
“The First Minister announced a £500 million fund to help businesses to prepare for Brexit. It’s time for the Finance Secretary to explain why he is sitting on £350million while businesses struggle to stay afloat and Brexit is just round the corner.”
The growth scheme was intended as a three-year plan to provide assistance to small and medium-sized new businesses, with the Scottish Government confirming at its launch that it would “provide up to £500 million over three years of investment guarantees, and some loans, up to a maximum of £5 million per eligible business”.
Mr Mackay's letter says that the SGS has provided funding to a range of small and medium business from family pizza firms to fish farms and even banks.
Scottish Liberal Democrat economy and fair work spokesperson Katy Gordon said: “The SNP’s flagship economic programme has only paid out a fraction of what was promised.
"At a time when the economy is patchy and the outlook is bleak, the Scottish Government is failing to deliver on the promises made to businesses.”
A spokesperson for Derek Mackay said that the Growth Scheme had "leveraged in over £100 million of private money."
He added: “The reality is that we are investing record levels in the economy and are establishing the Scottish National Investment Bank, which will provide a long-term boost to the Scottish economy.
“At the same time the Tories are threatening to plunge our economy into recession by refusing to rule out a disastrous no-deal Brexit.”
Stuart Mackinnon, external affairs manager for the Federation of Small Business in Scotland, said: “Our research shows that Scottish business optimism is low at the moment, and that many investment and growth decisions have been put on hold due to the current political and economic context.
"It is perhaps understandable therefore that this money hasn’t been immediately exhausted, especially when many of the funds it supports are designed to encourage growth.
"On the other hand, policymakers need to make sure that this isn’t a problem with the design of the schemes in question.”