Small businesses had trouble accessing finance in the months prior to the credit crunch, according to new research.
A survey by Cambridge University's Centre for Business Research found that 29% of small businesses seeking finance in 2007 were entirely or partly rejected, compared to 24% in 2007.
The research also found that small firms sought, on average, £470,000 in 2007, compared to only £82,000 in 2004.
Nick Palin, director of finance and administration for the Forum for Private Business (FPB), said: "The credit crunch has made accessing finance much more difficult."
"It is important that the government streamlines the application process and that small firms consider switching banks, or seek out alternative funding streams."
Mr Palin also said that SMEs should be looking to cut their costs, and reminded owners and managers that up to £200 million of small business rate relief goes unclaimed every year.
The investigation also found that businesses in the construction sector were least likely to seek finance.
SMEs 'struggled' to access finance before credit crunch
