A new report commissioned by the banks and carried out independently by researchers BDRC Continental have found that banks lent less than 50% to new businesses.

The report has found that only 46% of new business which had been open for less than 5 years got what they wanted when applying for a loan or overdraft.

John Walker, chairman of the Federation of Small Businesses, said: ‘The very smallest businesses are the ones bearing the brunt of a contraction in┬ábank lending. They are losing out.’