The FLS scheme, which was launched in 2012, aims to improve the flow of credit to SMEs that have had difficulty in obtaining funds by lowering the cost of lending.

The newly released data, which was published May 29, shows that new lending to SMEs is down by £700m on last year. It also suggests that firms are trying to avoid accruing further debt and have become reluctant to borrow.

“It seems that firms are probably happier to pay back existing loans than borrow more money to buy new equipment,” said BAPC chairman Sidney Bobb.

“I think the thing that will persuade these businesses to want to borrow again will come from positive news about the economy in the media, which will create a feeling of optimism.

“The banks could help too, but there is a barrier between customers and banks at the moment: customers are reticent about approaching the banks and banks are more involved in procedures and not seeing what the customer is doing on a day-to-day basis.”

With some of the decline in lending down to banks having a reduced appetite to lend to the real estate sector, the report suggests that the news isn’t perhaps as bad for SMEs in other industries.

But despite a number of print firms still starting up or making major investments in new machinery, many have found that bank loans have become increasingly difficult to obtain and have had to find alternative ways of raising funds.

Managing director at newly launched digital print firm Dash Graphical Solutions Shaun Pritchard said: “Funding from the banks was impossible. As much as they say they have funds available, they weren’t willing to let us borrow. However, the business manager at Santander put us in touch with a business angel and we managed to secure the funding for starting up that way.”

Lawrence Corria, owner of Spectrum Print, which has recently installed a £35,000 B2 Horizon AFC-566FG folder said: “I have an impossible time with banks. I’ve got a building that’s almost paid for, machinery on finance and have been trading for 25 years with the same bank, but I get bullied into invoice financing. They really don’t want to lend money in the conventional way anymore.”

But some firms have been able to stick to traditional loans without any problems.

Ian McCurry, managing director of Belfast-based printer GPS Colour Graphics, which has continued to invest in new kit heavily throughout the recession, said: “We go to the bank for loans and we don’t seem to have any trouble with that. They generally seem reasonably okay to fund stuff for us and we’ve invested heavily in the past few years.”