Banks are turning down more than four out of ten applications for credit from Britain’s small businesses, according to a new survey which also reveals a further fall in confidence levels.
The Federation of Small Businesses (FSB) said its study highlighted the need for a new dedicated business bank to try to boost lending.
The organisation’s latest Voice of Small Business Index found that half of the 2,600 respondents wanted to expand in the coming 12 months.
But of the one in five that had applied for finance, the number of refusals increased from 40.6 per cent to 42.4 per cent on the previous quarter.
In addition, more than 60 per cent of the companies quizzed by the FSB thought that business finance was unaffordable – a figure that has increased in every quarter of 2012.
Andy Willox, the FSB’s Scottish policy convenor, said: “Half of all UK businesses want to grow, but two fifths applying for finance aren’t getting it.
“While we expect the Chancellor’s Funding for Lending may reduce costs for a select few, it is clear that there’s still a lot more that needs to be done.”
He added: “Businesses reliant upon discretionary consumer spend, including those in the hospitality and leisure industries, are amongst the least confident.”
The FSB in Scotland said it would publish a “fuller analysis” of the Scottish results over the next fortnight.
SCOTT REID