Additionally it's thought that lending targets set by the government through its Project Merlin agreement have not been met.
Not all banks are culpable here. It's thought Santander has lent beyond its £4bn target, for example, while other banks are also thought to be more or less meeting existing promises. But, as the Mail reported this morning, it's thought 82% public-owned Royal Bank of Scotland (RBS) is not one of these.
"Project Merlin was meant to make the banks lend to boost business and jobs. But they have lent less and charged more," Lord Oakeshott, the Lib Dem peer who quit because of concerns of the Project Merlin deal, told the Mail.
Falling confidenceThis news won't startle some small businesses. The Federation of Small Businesses claims business confidence crashed at the end of last year. Its confidence index, comprising some 1,600 responses from businesses across the UK, recorded a score of -24.5 – the lowest level since the index started in 2010; a fall of some 15.2 points over the last quarter.
Small businesses are not just fighting tougher lending restrictions but higher energy, inflation and reduced consumer confidence, as evidenced too in more Bank of England data. The amount of non-mortgage borrowing held by consumers slipped last month by the largest figure so far recorded - by £377m. Overdrafts, bank loans and hire-purchase agreements are all being snipped, the Bank of England said.