Britain's struggling smaller-scale firms face a £22 billion shortfall in the amount of credit they can access by 2017, the spending watchdog has warned today.
Around four out of 10 fledgling small and medium-sized enterprises (SMEs) have their applications for a bank loan rejected despite a number of Government schemes to improve lending, according to the National Audit Office.
It found that while most smaller firms prefer to access finance from banks than through any other means, the f low of new bank term lending to credit-starved SMEs fell by 23% between 2009 and 2012.
The funding gap - the difference between the funding required and the funding available - is up to £11 billion but "subject to some significant assumptions about the state of the economy" is predicted to double within four years, the NAO said.
It warned that while the Government's flagship Funding for Lending Scheme (FLS) was set up to increase bank lending, with particular incentives for finance for SMEs, the banks are able to "use the funding as they see fit".
L ast month the Bank of England said 41 lenders participating in its FLS lent a net £1.6 billion during the quarter, the first substantial increase in lending since the scheme was set up last August.
But lending to small and medium-sized enterprises (SMEs) continued to fall, shrinking by a net £583 million during the quarter.
The Government has set up a number of schemes to help boost business, which are mainly meeting their individual targets, but is failing to manage them as a unified programme, the report said.
Publicising the new £1bn Business Bank, aimed at easing problems firms have accessing credit, being set up next year will be a "key challenge", it adds.
Amyas Morse, head of the National Audit Office, said: "Access to finance is a significant and enduring problem for many small and medium-sized businesses.
"There is a range of schemes led by the Department for Business, Innovation and Skills to address areas of the market where there are problems.
"But there is work to be done in terms of managing the schemes as a unified portfolio and articulating what they are intended to achieve as a whole.
"Given the importance to the Government of promoting growth, greater benefits and public value could be achieved through treating the interventions as a programme, with a clearer focus on assessing what results can realistically be delivered."