Almost 30% of small to medium businesses (SME) were refused applications for funding from banks, according to the latest survey from Cambridge University's Centre for Business Research.

The 2007 SME finances survey included 2,500 UK businesses with fewer than 250 employees, 29% wholly or partly rejected funding compared to 26% in the last survey four years ago.

The investigation, commissioned by the Department for Business, Enterprise and Regulatory Reform (BERR), saw a rise in funding needs between the period. The last survey say SMEs needing £82,000 but last year the figure shot up to £470,000.

Of those that were refused funding, 45% tried at other banks and 30% turned to friends and family for investment.

The Forum of Private Business, a member of the BERR’s finance group, urged the Government to simplify the lending application process and encouraged small businesses to look for alternative route for funding.

To download the full report click here.