Sharp decline in small business lending

UK banks offered small firms just £900 million in extra loans last year, new statistics have revealed.

That figure is only a quarter of the average level of increased lending seen over the previous five years.

The data has come from the British Bankers' Association (BBA).

According to the figures, overall small business borrowing rose from £54.4 billion to £55.3 billion in 2009.

For the five years before, the average rate of annual increase in lending was £4 billion.

David Dooks, the BBA's director, explained the decline as a result of a reduction in demand for credit.

The BBA report went on to say that one of the trends noted in the statistics was a greater willingness among bank customers to pay off loans and boost savings.