A lack of trust in the country's banks is stopping smaller businesses from growth because of a shortage of funds.
That is according to Dr Adam Marshall, Director of Policy and External Affairs at the British Chambers of Commerce (BCC), who says that news of the availability of credit increasing is welcome news for firms.
However, he says that the smallest firms are still being put off asking for credit, meaning more needs to be done to encourage them to grow.
Dr Marshall said: "It is also unfortunate that while demand for credit from medium-sized companies increased in Q4, there was a sharp reduction in credit demand from small companies.
"In our view, this reflects discouraged demand among small businesses, with recent BCC research revealing that half of firms mistrust banks and building societies."
Last month, the government announced that the Enterprise Finance Guarantee scheme will help encourage banks to lend money in the coming months.
Posted by Thomas Fletcher