The next three months are likely to be crucial as small firms seek to borrow in order to protect cash flow.
The FPB surveyed more than 6,000 members to find out how small businesses are faring in the credit crunch. Although 33% said they had applied for funds in quarter four of 2008, 27% of these were rejected outright while 20% were partially rejected. In the FPB's previous Referendum survey, 12% of members reported difficulties in accessing finance as a barrier to developing their businesses.
24.7% of FPB members say they expect to seek new borrowing between 1st January and 31st March 2009. In addition, 7.9% expect to apply for finance between 1st April and 30th June, and 9% after 1st July.
The FPB's Chief Executive, Phil Orford, comments: "The FPB's ongoing research shows that UK lenders are still not providing sufficient funding for small businesses. The facts are now clear. Government and Financial Services Authority (FSA) policies have not improved the ability of banks to lend. In addition, banks have not passed on, in full, the Bank of England's previous three cuts to the cost of borrowing because many clients have fixed rate rather than variable rate arrangements."
Mr Orford added: "The bail-out has not delivered for small businesses or for the housing market. We are calling for additional measures to improve the availability of loans and overdrafts and for the delivery of the promised £1bn in small business funding."
