Facebook has launched a new video tool, aimed squarely at small and medium businesses.

The new offering, Your Business Story, enables business owners to create a photographic slide show of their business, overlay with music and share ‘what they are in the business of doing'.

The launch comes as Facebook announces that there are more than 50 million small businesses using Facebook's free Pages product and more than three million businesses – the vast majority of which are SMBs – actively advertising of Facebook. That's up 50% on last year, and more than 70% of those three million are outside of the United States.

In New Zealand, Facebook says more than 80% of people on Facebook are connected to a small business.

Facebook says Your Business Story is a designed to ‘celebrate the businesses that use Facebook to grow'.

“[It] makes it easy to create a video that shows what your business brings to the world. Because we believe the best way to tell the story of three million businesses is to empower each one to share their own,” Facebook says.

“Facebook is the bridge to the new mobile economy for small business, helping them communicate with customers anytime, anywhere,” a spokesperson says.

Facebook has been stepping up its video efforts in recent times as it tries to compete with YouTube.

It's a move that appears to be paying off for Facebook. In announcing its third quarter earnings in November 2015, the company claiming eight million video views a day, driven by the addition of Autoplay Video and Facebook's prioritising of videos on its news feeds.

Facebook says the top three verticals building business pages on Facebook are services, local commerce and eCommerce.

It says its stats show small businesses are mobile, with more than one million advertisers creating ads directly from mobile devices, and more than 20 million active Pages users using Pages Manager App.