Just over a year after the launch of the British Bankers' Associations' (BBA's) Business Finance Taskforce, new research suggests that it has not yet achieved its aim of repairing the relationship between banks and small businesses.

Factoring and invoice discounting are both forms of receivables finance that allow you to raise money directly against your outstanding debtors as a way of covering a 'funding gap' and this is intended as an introduction to what they are and how they work.

As part of their commitment to lending £190 billion to businesses in 2011 – including £76 billion to small and medium-sized companies – the ‘big five' banks have pledged to lend £19 billion in the first three months of the year. However, just £16.8 billion has been lent.

Banks are set to announce a new fund devoted to small business lending.

Each of the big name lenders - including Barclays, HSBC, Lloyds, Royal Bank of Scotland, Santander and Standard Chartered – could inject tens of millions of pounds into the scheme.

Bank fees and costs for small and medium-sized businesses have risen since the end of last year.

The Institute of Chartered Accountants in England and Wales (ICAEW), in its latest business confidence monitor, says many small businesses are unable to borrow from banks, because the lending criteria are too restrictive, reports the BBC.

Barclays Bank has said it will not sign up to any government plan to impose targets for lending to small businesses.

Steve Cooper, head of Barclays' small business division told the Financial Times: "I'm not going to sign up to a target. I don't want to create an expectation that if Barclays said no yesterday it could say yes tomorrow (because it has a target to achieve)."