Those starting an enterprise would get help under the scheme for the first six months, up to a maximum of £2,600.
Launching his business manifesto, leader Tim Farron will claim other parties cut tax for multinationals but he is on the side of small businesses.
He will also promise to review business rates and access to credit and loans.
Labour will also reveal its plans for business on Tuesday as it launches its general election manifesto.
The start-up allowance scheme, costing £146m over five years, will be one of a number of announcements aimed at differentiating the Lib Dems from Labour and the Conservatives.
Mr Farron will suggest that by pursuing a so-called "hard Brexit", which is likely to see the UK leave the EU's single market and customs union, the Conservatives have "lost the right" to call themselves the party of business.
"Unlike Labour and the Conservatives, we would stay in the single market," he will say. "The Conservatives have lost the right to call themselves the party of business. The Liberal Democrats are now."
"While the Conservatives focus on giving tax cuts to giant corporations, our focus is on small businesses seeking to grow."
A Lib Dem government would expand the state-owned British Business Bank to make it easier for firms to borrow. It would also review the system of business rates in England and Wales, whose revaluation earlier this year angered many businesses which were left facing bill rises of more than £1,000.
"Many firms are struggling to borrow to invest and that is suffocating an economy being propped up on consumer spending," Mr Farron will argue.
The party has already said it wants to do more to encourage shared parenting and promote work-life balance by offering new fathers an extra month of paid paternity leave.
On Monday, the Lib Dems outlined plans to abolish the pay cap on the public sector, which limits pay rises for staff in schools and hospitals to 1% per year until 2020, and to boost spending on policing.
The Lib Dems are promising budding entrepreneurs an £100-a-week allowance to help with living costs as part of their election offer for businesses.