The banking trade association indicated that, while new loans to small firms increased by £75m between May and June 2010, year-on-year new-term lending has decreased by £269m compared with June 2009.

Average monthly loans have declined by almost half since 2008, when banks lent an average of £991m to small businesses compared with £564m in 2010.

Matthew Goodman, head of policy at the Forum of Private Business (FPB), said its research showed that loans and overdrafts had decreased since the start of June.

"This is at a time when small businesses need more finance in order to expand," he said. "The need for finance is only going to increase as the economy grows and as small firms, which must be the catalyst for sustained economic recovery, try to meet renewed demand."

The FPB's latest Economy Watch survey showed that loan facilities for the 358 members on the member panel declined by £66,000 during the past month, while overdrafts decreased by £34,500. 

Goodman added that both banks and businesses need to find innovative ways of managing lending in this new economy.

"For the banks, that means a closer relationship with clients, understanding their business customers and their financial requirements.

"For businesses, it means presenting better quality financial information and, just as importantly, an awareness of alternative forms of finance."

However, BPIF corporate affairs director Andrew Brown said its own figures found that there was a slight improvement in the availability of lending quarter-on-quarter.

He said: "The situation of availability quarter-on-quarter didn't seem to worsen significantly. However, availability is still difficult and I would hesitate to use words such as improved. It's still extremely tight and pretty awful."