Small business support 'improving'

Alistair Darling urged world governments to keep spending

The UK's major banks have insisted support for small businesses is improving after figures showed lending rose by £391 million last month.

The British Bankers' Association (BBA) said almost 50,000 new small business banking relationships were formed during the month, while deposits from small firms grew by £577 million in June.

The banks came under fire from Chancellor Alistair Darling on Sunday after he said he was "extremely concerned" by the borrowing costs faced by firms as banks look to focus on rebuilding balance sheets.

He suggested banks had failed to keep promises to improve lending in return for massive taxpayer support.

While not commenting on the costs faced by firms, the BBA's monthly release revealed the amount of structured lending to small businesses in June rose by £366 million, compared with £133 million in May and £267 million in April.

There was a further £25 million extended in overdraft facilities.

BBA statistics director David Dooks said: "These figures provide more evidence of the high street banks' support for small businesses.

"Structured term lending rose by £366 million in June, while deposits and numbers of new business relationships continued to hold up, perhaps reflecting improved business confidence in trading conditions."