Corporate advisers warn that banks are forcing SMEs to take second mortgages and demanding personal guarantees.

Nick Hood, a spokesman for the corporate rescue firm Begbies Traynor, said: "We are getting busier, and the banks are telling us they have an increasing number of businesses in intensive care ... This is not a good time for any business to fall out with their bank manager."

Mark West, of chartered accountants Berley, added, "The credit squeeze has given lenders the opportunity to compel SMEs and specifically the directors to provide personal guarantees to secure the corporate borrowings of their business, clearly at a time they need the most help."

The Small Business Research Trust has also stated that during the first quarter of 2008, three quarters of companies with both overdrafts and loans reported an increase in lending rates over the past six months. Three in five respondents also indicated that this had a "negative" or "very negative" impact on investment.