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.