Four new lenders have been accredited to offer loans to small businesses under the Enterprise Finance Guarantee (EFG) scheme, the Government announced today.

The EFG gives vital funding to small and medium-sized enterprises (SMEs) that lack the collateral or credit history to secure a normal bank loan.

The four new accredited lenders are:

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)."