Business credit withdrawal 'significantly' higher

Leading high street banks have admitted to the government that business overdraft facilities are being withdrawn at a "significantly" higher rate than this time last year.

Meanwhile where facilities do remain in place, banks are willing to extend much less credit, according to the Daily Telegraph.

The admissions came as part of a small business finance forum chaired by Business Secretary Lord Mandelson.

Andrew Cave of the Federation of Small Businesses (FSB), who attended the meeting, said: "The percentage of overdrafts being withdrawn is significantly up on this time last year."

Meanwhile a poll of 5,000 FSB members released yesterday found that three in 10 firms had seen an increase in the cost of new and exisiting loans during the last two months.