Small businesses are supporting the major banks to a greater level than the Government, according to a report by The Forum of Private Businesses.

The FPB, which represents 25,000 small and medium-sized businesses across the UK, believes that the banking sector should be put under more pressure based upon what its own industry figures reveal.

Phil Orford, Chief Executive of the FPB, said: "The latest figures from the British Bankers' Association (BBA), for the quarter July to September, published on 24th November, state that total lending to small businesses has risen on an annualised basis from £49bn to £54bn, or some 9 percent. However, £44.8bn of this was term, or loan lending, up 10 percent over the same period, and only £9.3bn was overdraft lending, up by just 4 percent".

The FPB believes that, by comparing these figures with the net deposits of small businesses over the same period, which are holding up at a healthy £55bn, owners of small businesses would be within their rights to raise some pertinent and challenging questions to those banks that say there is a greater lending risk today than there was six or twelve months ago.

However, a bigger issue – that has been overlooked to date – is that small businesses are supporting the major banks to a greater level than the Government; some £55bn compared to the bail-out support of £37bn. This raises the question of whether the banks are at risk at all. There is almost absolute parity between total small business lending and total deposits. All the banks are doing is lending money deposited by small businesses back to small businesses. The banks sit comfortably, within the small-business lending sector at least, with no net exposure as long as this parity remains.