The Bank of England has not too long produced statistics showing that loans to small companies are in sharp decline with companies repaying billions.

Bank of England figures showed that lending to small businesses persists in uncertainty whereby firms are still paying back billions more than they are advanced. In fact it is now the fifth consecutive month that bank lending to small companies has decreased.

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It doesn't look good for small businesses trying to borrow through the 'depression'. Six months previously this wasn't the case as banks provided £300 million more in loans than was actually paid back.

The crashing banking predicament is much more shown as banks are not making finances easily accessible to clients – so much so that according to the Mail, "mortgage lending has plunged to a ten year low, leaving millions desperately struggling to find a home loan."

In addition the rate of gross mortgage lending dropped dramatically by up to 14 per cent last month adding to the issues.

Business Secretary Vince Cable has also had his say on the matter and denounced the banks saying, "‘I really do hope the banking community is listening. There is a potential train crash ahead.’

Over the previous 12 months, small companies actually paid back the banks £47 billion more than they received in new loans. This is the clearest sign yet that firms are repaying the loans they take out. Nevertheless too little is being distributed in the means of new finances.

Mr. Cable was talking at the recent Liberal Democrat conference in Liverpool where Deputy PM Nick Clegg also advised the banks to make funds more conveniently accessible. Mr. Cable compared the multi-million pound bonus deals with the bank’s failure to lend to the UK’s 4.7 million small and medium-sized firms.

As reported by Mr. Cable, ’We [have] made it very clear that we were very concerned about the way the banks were performing in relation to lending to small and medium- sized enterprises. We spelt out that there were what we called sticks and carrots. One of the sticks is in relation to tax measures. It remains an option, particularly if the banks decide to spray out lots of money on bonuses and dividends at a time when small businesses are being starved, then the case for taking action is a compelling one.’

Nick Clegg, The Deputy Prime Minister added the new ConDem government are ‘working flat out to get the banks lending again to small businesses’, which he then went on to recount as ‘the lifeblood of our economy’.

The Daily Mail have started a drive to "Make The Banks Lend," in reaction to both the plight of small companies and following Mervyn King’s criticism expressing his deep dismay about the result of the banks’ behaviour to small companies.

A freshly released Bank document on ’Trends in Lending’ affirmed the situation is getting better for larger organisations, but has not changed and remains tight for smaller businesses. This is also due to the interest rates charged which are lessening with big businesses but holding the same for small companies.

Things look bad, no matter what the financial source. John Walker, chairman of the Federation of Small Businesses, proclaimed firms are ’still facing an uphill struggle’ and warned, ‘ Demand for finance is at its highest as the economy enters recovery, something which the UK economy is tentatively moving through. Small firms don’t have a huge amount of scope in accessing finance, unlike larger businesses.’

The call seems to be towards a higher level of competition in the banking field, which it intends will motivate increased competition via cheaper charges and better accessibility.

Regardless The British Bankers’ Association asserts they are doing their level best to support small businesses in this problematic economic period.

A spokesperson The British Bankers’ Association declared: ‘The UK’s banks have established a taskforce to report to the Government on exactly this issue – addressing how banks can further help small businesses through the recovery. We absolutely agree with the Government that small businesses are vital to securing the economic recovery and have committed to offering every assistance to viable businesses.’