Project Merlin fails to increase lending

More than three-quarters of small businesses have seen no change in the approach by banks to lending since the Project Merlin agreement in February.

The poll of more than 500 small businesses also found that 70 per cent said they would expand their businesses if they had more funding, with most of that number keen to employ at least one more person. Under the Project Merlin deal with the Government, the big four banks had agreed to lend more to small firms.

"UK small businesses see no improvement in bank lending since Project Merlin was announced," David Catterall, the head of survey compiler Hotfrog, said.