Mark Nelson of Compass Business Finance told PrintWeek that, on a scale of one to 10, the availability of overdraft lending to SME printers was "a three at best" and that this was causing far greater problems than the availability of finance for capital expenditure.

"For printers, financing equipment is not a problem," he said. "Asset finance is there, it's stable and it's lending money - we don't speak to many printers whose accounts are good and rationale for investment is good and who can't get the funding.

"There are three categories of lender: Category A, including high street banks; mid-market; and sub-prime. Printers can generally get the funds they need [to invest] and will generally fall into the right category for their business.

"But the biggest problem for printers is cashflow and the Regional Growth Fund and the various other government-backed schemes that are out there are not really aimed at that.

"Overdrafts and the support of overdraft lending are the number one requirements for printers, because they're getting squashed in the middle by clients extending payment terms and suppliers restricting credit.

"If someone found a solution to that it would be vastly more beneficial to a printer than helping them to invest in new technology. Yes, you need to be able to invest but for most SMEs that isn't the issue."

Nelson added that the Regional Growth Fund, while beneficial to those that had received grants, had not been used in the manner the government intended (to support those who would not otherwise have been able to invest).

"Most of the people who have benefitted from it would have been able to get finance anyway - they've just picked up a grant as a portion of that, which is great for them but it's not what the RGF was set up to do," said Nelson.

He added that many SME printers looking for an overdraft, as well as those with existing overdraft facilities, were being forced down the more expensive invoice finance route even in cases where an overdraft would be "vastly more efficient".

"The bank won't want to do one first and foremost and even if you've got one already they will continually try to move you and in some cases force you to go to an invoice finance facility."

Nelson's comments followed last month's announcements from the chancellor George Osborne and business secretary Vince Cable that the government would invest £1bn in a new state-backed bank that would raise and lend up to £10bn to SMEs through secondary funders.

Nick Mockett, partner at Moorgate Capital, said that implementing the latest government proposal, while seemingly answering repeated calls in PrintWeek for a government bank, would not be without its difficulties.

"A key challenge will be raising the money to lend and the interest rate at which it can be borrowed," he said. "Presumably there is a government guarantee so that may [keep rates] quite low.

"But the biggest hurdle - getting regulated - should presumably be accelerated through the soon-to-be-disbanded FSA; it seems this will be a wholesale organisation, so the regulation of the retail front end will already be in place."

Mockett added that dealing with a limited number of routes to market rather than individual customer businesses would make getting the systems in place less complex, further speeding the process.

For now, details of the new bank remain scarce and the government is not expected to make any further announcements prior to the chancellor's autumn statement (at 12.30pm on 5 December).