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.

Yet, while the banks say the drop is due to a fall in demand as firms focus on paying back existing loans, many owners claim that is not the case. Banks are accused of asking for increased personal security, are offering businesses more expensive overdraft facilities and are making inconsistent lending decisions.

Gavin Wheedler, chief executive of translation agency Applied Language Solutions, told BAD News that he was expected to put up security when he approached a bank for a loan: "We approached the banks and our experience was pretty poor. Unless you have big assets that they can take as security, then their answer is 'no'. What's happened is they've gone from one extreme to another, instead of being in a sensible middle area."

Michael Izza, the chief executive of ICAEW agreed. "Before the recession, banks were lending to businesses they probably shouldn't have been lending to and they were guilty of probably being rather exuberant in their lending,” he said.

Despite complaints from some businesses about the banks' attitude to lending, the ICAEW survey found the percentage of SMEs saying access to capital is a challenge fell to 20%, from 30% at the end of 2009.

www.bbc.co.uk/news