Government proposals to match SMEs that have had applications for finance turned down by the banks with alternative lenders have been welcomed by the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said: “Accessing bank finance is often difficult for SMEs. Over the past five years the problem has been particularly acute and the construction sector has been hit harder than most. As the major banks have looked to reduce their exposure to the built environment sector, construction SMEs have found themselves at the back of the queue.

“In a recent survey, one in five FMB members reported having to abandon plans for growth because they could not raise the necessary finance from their bank.

"This continues to have a negative impact on jobs and growth, which is holding back the economic recovery. These are otherwise viable and successful firms and it is likely that there are alternative lenders out there that would be willing to lend.

"Any proposals to improve the links between these lenders and SMEs deserve careful consideration and we will be consulting our members on the details of these new proposals before feeding back our views to government.”