Vivarail has secured £1.5 million in new funding to help support its growth plans in the West Midlands.
The company designs and manufactures modular trains and will use the new capital to relocate to a larger site in order to scale up its operations.
|The first two completed Wales and Borders trains outside together for the first time. 230006 has been undergoing extensive testing on the Cotswold line|
The Stratford-based firm is also expanding its workforce with five jobs set to be created.
Vivarail specialises in developing a range of hybrid, electric and battery products for rail carriages and systems and has created an interchangeable power system which enables trains to be converted to run on batteries.
It counts names such as West Midlands Trains, Transport for Wales and South Western Railway among its clients.
Finance director Ian Wenman said: "As a business, our focus is to continue to develop environmentally friendly solutions for the rail industry.
"We look forward to taking this next step in our growth journey, relocating to a larger site and expanding our team."
The £1.5 million loan has been arranged through the Midlands Engine Investment Fund by Maven Capital Partners.
Demetri Theofanou, investment manager at Maven, added: "Vivarail is a significant Midlands-based business that has developed some very interesting technology that will help the rail sector reduce its environmental impact and carbon footprint.
"We are delighted to help finance this innovative business and look forward to seeing it embark on its growth journey."