The British Business Bank has named Wolverhampton as the top local authority in the West Midlands for its Start Up Loans programme.
The city has seen start-up businesses successfully draw down 464 loans since 2012, worth £3.3million.
Louise McCoy, commercial director at Start Up Loans, said: "It's wonderful to see Wolverhampton recognised in the West Midlands for its contribution to entrepreneurship.
"I'm always inspired by the stories of small business owners who have used the Start Up Loans programme to take the leap into business ownership.
"The West Midlands has an ever-growing pool of diverse small businesses and I'm pleased to see that, with the help of Start Up Loans, they're able to access the finance they need to grow and contribute to the local economy."
City of Wolverhampton Council, Deputy Leader and Cabinet Member for City Economy, Councillor Stephen Simkins, said: “These are incredibly difficult times for our small businesses, and we are constantly looking at new ways we can support them and help them through the current economic crisis.