Total drawdowns from the initiative reached £13.8bn to 31 December 2012 following its launch in July after the scheme saw only £4.4bn withdrawn in Q3, the first period during which the scheme operated.

The number of participants withdrawing from the fund grew from six in Q3 of 2012 to 11 in Q4, while the total number of organisations signed up to the scheme grew from 35 to 39.

Yet, according to the latest figures published by the Bank of England (BoE), cumulative net lending decreased by £1.5bn across FLS users since the start of the scheme, a further deterioration from the £1.1bn lending decrease reported in Q3 last year after the first two months of the sheme's operation.

Nationwide, Virgin Money and Barclays (which joined in August) have the highest cumulative net lending figures, recording levels of £3.6bn, £1.1bn and £5.7bn respectively. Theses figures are set against drawdown levels of £2bn, £0.5bn and £6bn (the highest of all users) respectively. Barclays shows a net shortfall of £300,000.

Meanwhile Santander recorded a fall in net lending of £6.3bn despite drawing down £1bn while Lloyds Banking Group's lending has dropped by £5.6bn against £3bn withdrawn since the scheme started.

Launched as a replacement for the short-lived National Loan Guarantee Scheme (NLGS) to boost lending to SMEs, the FLS has attracted scepticism over its effectiveness: in its first month of operation, research showed that lending dropped by £2.2bn.

BoE deputy governor Paul Tucker recently admitted that he was "worried" that the scheme was not reaching the SME sector as far as intended while business minister Michael Fallon unveiled a plan to force participating banks to publish information on their loan allocation to "get to the bottom" of where the funds are going.

Deal Bureau’s Gerry Hoare said: "FLS isn’t helping printers or many businesses. The banks’ credit criteria are still strict and therefore the funds are only being used for stronger companies who can borrow cheaper than they would have if the FLS hadn’t been there.

"All the companies I talk to are finding it difficult to get loans. More secondary loans are coming to the market, which indicates that the main banks are not providing what clients need."

Print finance broker Compass Finance’s Jamie Nelson said: "People are borrowing money still but the FLS is not ‘make or break’; it just helps those who are borrowing.

"A lot are still holding their cards to their chest and seeing what happens with the market to decide if it makes sense to borrow. They’ve still got to have the business and revenue to make it work

Nelson said had seen more money coming through from FLS in December and January and added that the latest figures should be "treated with caution" as it is too early to determine the success of the initiative."

The Forum of Private Business (FPB) chief executive Phil Orford said  he was "not convinced" by claims from the banks and government that businesses were not asking for a slice of the funds despite their availability.

He mused that, if true, the situation could be attributed to the "untold damage" done to relationships between traditional lenders and firms.
 
"We appreciate the FLS money will take time to filter through, but businesses are desperate for this cash now, and the anecdotal evidence from our members is that bank lending is far from where it needs to be, and all too often the banks remain extremely risk averse," he said.

BoE executive director for markets Paul Fisher stood by BoE’s claim that the scheme was unlikely to impact net lending to businesses until mid-2013. He said: "Even though lending rates have fallen, it is still quite early for much extra money to have flowed from the application stage into actual loans, compared with previous plans which showed that lending was most likely to fall in aggregate without the FLS."

Today’s Q4 2012 FLS breakdown was supplemented by a note stating that overall lending during January 2013 had risen by £3.1bn since December, and that the fourth quarter was typically weak for lending. BoE added that it expected net lending to continue on a gradual uplift throughout 2013.