With signs that the worst could be over in this recession, banks are not increasing access to funding, according to recruiters.

On Monday, Chancellor Alistair Darling called on banks to lend more to small firms, during a meeting with banking bosses.

Peter Burgess, managing director at Retail HR, told Recruiter: “The banks are being shocking. With my own business, I don’t need to borrow money.

“The way the banks are behaving to small businesses is even more disgraceful than it used to be. They are now terrified of their own shadows and of lending to anyone.”

Hannah Horler, managing director at Cartwheel Recruitment, says: “I would not say it has massively improved. I think they need to do a lot more than they are doing. I don’t think they are as willing on lending and overdrafts.”

Luc Fountain, managing director at Liberty Resourcing, adds: “I don’t like borrowing money. We always try to avoid it at all costs.

“My clients seem to be okay but are extremely cautious. Budgets are tight and they want to keep the people they have got rather than letting them go.”

Edward Rimmer, UK and Ireland chief executive, Bibby Financial Services, says the banks are being governed to rebuild their reserves and balance sheets and start lending more money but this is nigh on impossible during a recession when the number of failed business is up 50% year-on-year.  

“The real problem is for medium businesses. Growing pressure is on the banks (particularly RBS and Lloyds, in which the government hold a large stake) to free-up credit for small businesses. However, the slightly larger business that fall into the ‘medium’ end of the scale – likely to be the more stable businesses - are still struggling to access cash and refinance at competitive rates.

“In this case, it seems all the government is concerned about is reacting to negative news rather than developing a real understanding of what is actually going on within the various areas of commerce.  

“Rather than continuing to hammer the banks, I would suggest a better approach would be to set up a robust taskforce of real business people with the relevant experience to act in a clear and concise advisory capacity.”