With many UK SMEs still facing a liquidity crisis, the FPB claimed that a move away from bank lending could help many businesses to stay afloat.

Following last week's revelation that part-nationalised banks RBS and Lloyds are still failing in their commitment to lend more to SMEs, the FPB is urging the government to create more alternative options for small businesses that have been denied finance.

It said that more "counter-cyclical" alternatives need to be put into place, which will be less affected by recession and will increase choice and diversity in the marketplace.

Matt Goodman, FPB policy representative, said: "Our research indicates that smaller businesses are too dependent on the banks for finance.

"At the same time, the recent crisis in the banking industry has made it clear that access to credit should be less dependent on the economic cycle.

"Any way of reducing the 'feast or famine' view of credit needs to be resolved before the next economic downturn."

Goodman added that it was the government's responsibility to put "credible alternative sources of finance in place, which will reduce the monopoly on lending the banking industry has".

Policymakers should look into corporate bonds, leasing, invoice financing, venture capital and supply chain credit, the FPB said.

According to research carried out by the organisation, the availability of credit from banks is the number one problem for SMEs in terms of accessing finance, affecting 19% of respondents.

This was followed by the cost of finance, which affected 11%, and the perception that banks will only lend to businesses that have assets, with 10% of respondents.

FPB chief executive Phil Orford attended a meeting on non-bank lending last week with City minister Lord Myners at 11 Downing Street.