The number of small and medium-sized businesses (SMEs) applying for external finance fell during the first three months of 2013, according to research by BDRC.
Just 39% of SMEs sought to borrow money during quarter one of this year, compared with 41% of firms during the last quarter of 2012, with smaller firms employing nine people or less being the least likely to finance themselves with external credit.
Around 32% of all companies borrowed money in quarter one of this year, down from 40% during the same period in 2012.
A general lack of confidence and trust in the economy is believed to be behind many companies of differing sizes and turnovers shying away from credit, deeming current economic conditions as too risky.
A growing number of firms who are choosing to access credit are turning to alternative means, with business credit card usage reducing by 3% between quarter one in 2011 and 2013.
Chief executive of the Forum of Private Business, Phil Orford, said: "It seems likely that the banks are still licking their wounds, and that may be the case for some time to come yet, but this pattern of decline can't continue if we are to have meaningful growth. "What seems highly likely now is that any recovery this summer is going to come largely from firms spending their own stockpiled cash, but this isn't sustainable in the long term. While three quarters are happy non-seekers of finance, there will come a point when they do need the help of lenders to grow. That could be the crunch point and be a problem in the making for years to come."
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