For far too long, small businesses have found it difficult and costly to raise new finance to support their growth and improvement. In fact, recent research by the Federation of Small Businesses shows that four in ten (42 per cent) of small firms feel that new credit is unaffordable, with more than a third (35 per cent) being offered interest rates of seven per cent or more.

It is hardly surprising then, that around half of small firms are ‘permanent non-borrowers’, with almost three-quarters saying they would rather grow their business more slowly than borrow to enable faster growth. This lack of access to affordable finance is clearly holding back small firms’ aspirations, growth and the economic prosperity of the UK overall.

I am glad that the issue is recognised by Government and that measures have been put in place to try to address it. For example, the Treasury’s Bank Referral Scheme puts small firms that have been denied credit by banks in touch with alternative finance platforms. This initiative has helped hundreds of small businesses to access the finance they need to invest, grow and become more productive.

However, only half of referred firms have gone on to contact a platform and less than five per cent have actually secured finance. So, even when a helping hand is available, few are willing to grasp it!

Too many firms are reluctant to borrow and realise their full growth potential. Those that do are too reliant on traditional debt products, or only approach the bank they’ve always dealt with and then throw in the towel if they’re turned down.

We need a fundamental shift in the UK’s small business finance culture and there are plenty of lessons we might learn from elsewhere.

For example, in the US equity finance is booming. This approach can bring not only growth finance, but also advice and support from experienced and successful business investors.

After all, lending small businesses money while at the same time lending them a hand, could be the best way to maximise their growth potential.