The number of complaints from small businesses about bank loans, has rocketed by 119 per cent in the last 12 months says new bank Aldermore.

496 complaints were made to the Financial Ombudsman (FOS) by small businesses about their bank loans or overdrafts over the last year compared to 226 complaints in the previous 12 months.

Aldermore says that these complaints are likely to be just the tip of the iceberg as only businesses with an annual turnover of less than €2 million euros (approximately £1.8 million) and fewer than 10 employees can complain to the FOS.

Aldermore says that the figures prove that there is rapidly growing discontent amongst small businesses over their treatment by the big banks.

Phillip Monks, CEO of Aldermore said: “Small businesses that we talk to actually feel betrayed when their businesses is running fine but the bank still decides they are not going to renew their loan facility.

“Another complaint we hear from companies is that the bank is going to renew their loan facility but only if they pay a huge arrangement fee – a fee they were never asked for when they first took the loan out.

“Some banks do that knowing the customer might be too worried to shop around.”

“The big banks aren’t happy to admit but their balance sheets are under strain and they are having to knock back perfectly good customers.”

Net lending to UK businesses fell by £3.2billion in Q1 2010. Gross lending to businesses has fallen by 38.8 per cent in the same period, £43.3billion in Q1 2009 to just £26.5billion in Q1 2010.

The data obtained by Aldermore also reveals that the number of complaints made against all financial services providers by small businesses has rocketed by 43 per cent in the last 12 months from 3252 in 2008/09 to 4656 in 2009/10.

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