Small and medium-sized businesses (SMBs) are still not getting the support they need from the banks, a leading lobby group has warned.
The Forum of Private Business (FPB) has called for "real action" to support SMBs, which make up 99 per cent of companies in the UK.
Earlier this week, the Bank of England's quarterly 'Trends in Lending' report revealed that lending to businesses contracted by around £4.5 billion in the three months to May.
And with SMBs needing credit to commit to their growth strategies, this is a concern to the FPB.
Phil Orford, chief executive of the organisation, said the continued contraction in lending is "yet another sign" that more needs to be done to stimulate demand in order to boost lending.
He suggested it is too early to say whether the changes to the Funding for Lending scheme in April have had a positive impact.
"But what is clear is that it is the demand side that now needs to be tackled," Mr Orford claimed.
"The banks should take the lead in raising awareness of their financial products and deals available to small businesses."
Mr Orford said the lack of awareness and understanding of alternative sources of finance available to SMBs is another issue which needs tackling.
"Real action must be taken to diversify the finance market and to educate small businesses about alternatives to the big banks," he claimed.
Mr Orford noted that the FPB is working with partners to improve members' awareness of alternative sources of finance, and is urging others to follow suit.
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Posted by Steve Williams