Recent research carried out by Cambridge University shows that, although the number of small firms seeking finance in 2007 increased only slightly from 2004, when the previous survey took place, the level of funding required soared from an average of £82,000 to £470,000. That figure is likely to have increased markedly over the past year.

"It appears that, just as the funding requirements of small businesses are increasing because of the economic downturn, banks are cutting back on both the level of facilities they provide and the services they offer," said the FPB's Chairman, Noel Guilford. "Accessing finance in order to maintain a healthy cash flow is always a key issue for small firms – now it has become a matter necessary for survival as much as growth."

He added: "The FPB is urging banks to recognise the difficulties small businesses are facing, and firms to take steps to protect themselves, such as seeking alternatives to traditional funding streams."

Mr Guilford listed the major concerns facing small businesses in the current banking turmoil:

- Reduced borrowing capacity
- Reduced service capacity as banks cut staff, including bank managers and relationship managers
- Branch closures
- Banks reducing their borrowing and calling in loans.

FPB member Mark Esslemont of Esslemont's, a clothing and accessories shop in Aberdeen, is a customer of the newly-formed ‘super bank', having formerly banked with HBOS. He told the FPB that he had doubts about the level of service being provided, even before the merger.

"The bank recently wrote to inform us that our overdraft base rate was increasing from 2% to 4.5%. It then slapped us with a £250 charge for the privilege of filling in paperwork. What annoys me is that the bank has given us less than a month to deal with the fall-out of this change," said Mr Esslemont. "There is now a greater problem on the horizon with the Lloyds TSB and HBOS merger. I am concerned that I will have fewer places to go – in effect, the banks know that I am in a corner with little room to manoeuvre."

He added: "Like many businesses, I am revising my plans and looking at the next 12 to 18 months due to volatility of the economy. I am concerned that the Government has created a banking monster, which in years to come may indulge in anti-competitive behaviour, and as a business customer I will have little choice but to accept any alterations made to the terms of my overdraft or loan."

The FPB has also received reports that some smaller businesses are struggling with additional bank charges and other changes to their accounts, leading them to question the banks' commitment to their small-business customers.

FPB member David Brassington, of Family Books Keynsham, Bristol, blasted additional bank charges as being "unhelpful" at a time when more support is needed.

"Like a lot of business customers, I have found myself assaulted from all sides by numerous bank charges, which I feel are unjustified. It appears banks charge for everything and anything these days," said Mr Brassington, who banks with NatWest. "When the customer is in the wrong, the bank is available any time of the day. However, when the bank is in the wrong, it's impossible to find anyone."

He added: "I have been with my bank for some 12 years. This appears to count for little, given a recent visit when I asked to speak with the bank manager and was told he had left, and that I was now under the remit of an ‘area bank manager,' who is a lot like the Scarlet Pimpernel – impossible to find."

Other charges, including those imposed by the major credit card companies, are also a concern. In June 2008, businesses were required to comply with the Payment Card Industry Data Security Standard (PCI DSS), which is a new security standard to tackle credit card fraud.

Stuart Hamilton, of Hamilton Edge Tools Ltd, Gwent, believes that lenders are passing on the cost of credit card crime to their small-business customers.

"We only found out about this in September. If we were not compliant, should there be a case of credit card fraud involving information acquired from my firm, then the credit card company reserves the right to audit all of our records – passing the costs back to us – and a fine can also be imposed," said Mr Hamilton. "The major banks have all got together to introduce this – if I got together with all of my competitors and we introduced compulsory across-the-board charges, I think the Government would consider it to be a cartel."

With additional bank charges and tighter lending facilities, small businesses are increasingly struggling to access the finance they need. The FPB is advising its members to review their business practices to make the most of the cash that is available.

"Finance will come to be the key issue over the next 12 months," said the FPB's tax adviser, Mike Benson. "As well as normal business loans, many small businesses have relied on remortgages and even credit cards for funding."

For more information about accessing credit and beating the credit crunch, call the FPB on 0845 130 1722.