SMALL businesses are the backbone of the North-East economy and will drive the growth needed in the coming months and years.

However, they are being held back by the lack of lending from the banks.

Recent Bank of England statistics show that demand for lending has declined in the past three months – hardly surprising given that the banks have massively cut lending to small businesses since the recession started. Why would any small business now approach the banks for help?

There are only so many times you can be told “no” before giving it up as a bad job.

Many Federation of Small Businesses’ members have also continually pointed out that it is the cost of getting finance and the repayment terms that have stopped many approaching the banks.

Many would like to see more action being taken by the Government and banks themselves to help small businesses deliver the recovery we all want to see.

My fear is that many small businesses are being ignored and not helped because they are perceived to be more risky than a big business. The banks should be more trusting of their local bank managers rather than rely on credit control teams based outside the North-East to decide whether a small business is worth the risk.

Arthur Barnes, Middlesbrough