In another survey it was found that more firms were hiring abroad to cut down on staffing costs.
Freelancer.co.uk, an outsourcing website, said that there had been a 26.1 per cent rise in small businesses hiring freelancers in India, a 9.97 per cent rise in Pakistan, a 6.75 per cent rise in Romania, a 4 per cent rise in Bangladesh, and a 3 per cent rise in the Ukraine and the Philippines.
Louise Beaumont, co-founder of Platform Black, said: “Clearly things aren’t right between many British businesses and their banks.
“Too many are trapped in a loveless relationship with their bank. Unhappy and frustrated but unaware of what the alternatives might be. The fact that more than half haven’t changed banks for a decade hints at how cowed some have become.”
Data from the Bank of England reveals that banks were not willing to lend to small businesses, which are important for the health of the UK economy. Almost 70 per cent of Britain’s businesses feel relationships with their bank has declined and many businesses have resorted to borrowing cash from friends and family.
Many have been left to feel frustrated as banks restrict credit, which is the biggest gripe amongst small businesses according to Platform Black. Businesses are seeking a way out of a government system that allows banks to carry on with their bonus culture in the face of an ailing economy which is propping them up.
Most are cutting costs by hiring cheap foreign workers through the internet as the Bank failed to lend its allocated £4.8bn allowance to businesses. Instead companies have said that they have been hit by higher interest rates and tougher terms and conditions.
The biggest issue among small businesses is that banks are reluctant to offer finance.
Around 40 per cent of businesses saw loans or overdrafts rejected. The same number had their overdraft facility withdrawn or reduced.
Businesses are turning to recruiting cheap workers abroad.
Anthony Badaloo, principal for London-based Church Hill Finance, said: “The problem is some banks are not normal businesses as they are supported by taxpayer money.
“So the banks are immune to the normal rigours of the free market, so I believe they have an artificial existence.