Three quarters of small businesses think that bank lending margins on loans are too high, up from 73 per cent last year, research finds.

Three quarters of small businesses think that bank lending margins on loans are too high, up from 73 per cent last year, research finds.

According to a study of small businesses by IT finance provider Syscap only 8 per cent of respondents say that their ability to access bank loans has improved over the last year and a third (33 per cent) say that it continues to get worse.

Syscap CEO Philip White says, ‘It is disappointing to see that such a significant percentage of businesses feel that obtaining a business loan at an affordable rate has got tougher over the last year.

‘It has been four years since the collapse of Northern Rock and the start of the credit crunch, but business lending conditions are still a long way from recovery.’

Earlier this year, the Chancellor initiated Project Merlin, an agreement between the government and the UK's four biggest banks to lend more money to small businesses in 2011.

According to Bank of England figures published in July, lending to small and medium-sized businesses fell more than £2 billion short of targets set as part of the Project Merlin deal.

Adds White, ‘Despite Project Merlin, business borrowing is still too low. More still needs to be done to lower the cost of borrowing so that businesses can make the investments they need to grow and create new jobs.

The research also reveals that 89 per cent of businesses consider the arrangement fees on loans to be too high, up 9 per cent from 82 per cent last year.

Other findings include that 34 per cent of businesses are delaying investment in their business due to difficulties in obtaining finance.

Some 47 per cent of respondents say that it is ‘very important’ for them to have access to finance.

See also: Bank lending to revert to 2007 levels