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.

More than one third of UK small and medium sized businesses have been declined a bank loan in the past three months, new research from business software and service provider Sage UK today revealed.

The Sage UK Omnibus surveyed 1,500 small and medium sized enterprises (SMEs) in May 2010. It found that 34 per cent of UK SMEs who attempted to borrow money from a bank had their loan application declined. The research also highlighted that 58 per cent of the businesses questioned did not feel they were given an attractive rate for their loan.

Robin Moore, product manager of Sage’s Small Business Division said: “The decision on a loan can make or break a firm, so it is a concern that so many SMEs that evidently believe they need the funds are being declined. There is a range of best-practice measures that entrepreneurs can adopt to increase their chances of getting the green light on a loan and our advice would be to put yourself in your bank’s shoes and think about what they would need from you.

“Producing a detailed business plan is paramount. It might feel like information overload, but by conducting and presenting research that proves why you need the funding, explains how much finance you need and how are you going to pay it back, you can address any concerns the bank may have before they arise. It is equally important to develop and provide a contingency plan with the best and worst case scenarios, as this illustrates to the loan provider that both you and your business are prepared for any eventuality.”

Launching a new business is an exciting and rewarding experience, but nobody expects you to know everything about it right at the start. True, you’re expected to know your own products and services, and the market in which you’re operating. But there’s much more to it than that. If you don’t have lots of experience in running your accounts, arranging business insurance or marketing you services, for example, there are plenty of places where you can get help.

Your first start should be your local Business Link. This is a Government agency, organised regionally, that provides information and support for all small businesses – whether they are start-ups, established companies or firms looking to expand. It’s particularly strong on the administrative side of running a SME, with guidance on taxation, employment, finance and regulations. But it also has plenty of useful tips on marketing, international trade and grants, and runs local events that provide advice and networking opportunities.

The Federation of Small Businesses is a member organisation that campaigns on behalf of SMEs. It promotes the interests of small businesses in Parliament and in the media, but it also gives its members a range of benefits. Members are entitled to legal information, and can download templates of legal documents.

Members also get tax advice and there are a number of special deals you can access when it comes to banking, loans and credit cards. “Our purpose is supporting small businesses, and in addition to our lobbying work, we’re always looking for ways to give our members more help,” says a spokesman for the FSB.

It’s also worth visiting the websites of the major banks; they all offer accounts and services to small businesses, and many of them have plenty of advice to companies, which is available whether you are a customer or not. Lloyds and HSBC have two of the better websites, but most will have something of interest. Coverzones has plenty of useful and easy to understand information on specific insurance policies that small businesses need to consider, including laibility and indemnity cover.

As part of the Government’s long-term strategy to get more of its services online, there is now a wealth of useful sources of information for small businesses, many of them available through Direct.gov. The site is generally set up for individuals, so if you’re a sole trader then you can receive guidance on your rights and responsibilities, as well as information on tax and benefits. For larger companies, the taxman will be able to explain all about VAT, corporation tax, employers’ tax and the like. It’s particularly useful for companies undertaking new ventures, such as employing someone for the first time or selling products and services overseas – each of these come with potential liabilities so it’s a good place to start if you’re considering such a move.

The Department for Business, Innovation and Skills concentrates mainly on the regulatory side of running a small business. The site is currently being updated, so at the moment can be a little difficult to navigate, but if you can find it there’s plenty of help available.

Tens of thousands of people decide every year to go it along. And while the risks are high, the rewards can be enormous. Working for yourself, earning your own money and controlling your work means much more than simply working for the man.

But there are no guarantees of success. A significant number of new ventures never reach their second birthday, and failure can affect your personal finances significantly.

So you need to do some homework before you risk your money. Here, we give you ten top tips to get on the right track from the start.

1. Focus on your product

Whatever your business, you need to make sure you really know what you’re doing. Who else is in the market? If there’s plenty of competition, what are you doing to make your business stand out? If you’ve found a niche – either a product that doesn’t exist, or a service not available locally – think about why nobody else is doing it. There may be a good reason for it not being available.

2. What kind of company are you?

“Deciding on what type of company you set up as is key,” says a spokesperson for the Federation of Small Businesses. “It affects the kind of finance you get to work with, the roles and responsibilities of the owners and your tax status.” For start-ups, there are effectively three main options – a sole trader, a limited partnership or a limited company. Each has its own benefits and disadvantages, and it’s well-worth doing some research on each to see what is best for you.

3. Which bank?

Despite the current economic turmoil, banks are still keen for business from start-ups, and many offer a range of incentives. While the benefits of free banking for a year or cheap initial overdrafts may seem vital, it’s more important to look at the long-term value, so compare the fees and charges once your deal period ends before you take the plunge.

4. Other financial services

No matter which bank you end up with, you don’t have to take all the products you need with it. If you need a small business insurance quote or a loan rate, compare the prices of the whole market to get the best deal.

5. Check your liabilities

As a business owner, you have responsibilities to your customers, your employees and your suppliers. If you fail in those responsibilities, you could be held liable for any injuries or damage that result. Make sure you have liability insurance in place to cover yourself against any claims.

6. Take advice

You can’t be an instant expert in all areas of running your business, so don’t be afraid to ask for help. Professional groups, such as your bank, will be able to give you information and advice on some areas, but it never hurts to canvas friends and family for their tips.

7. Don’t ignore the paperwork

There are legal implications for businesses that don’t keep up with their administration, but a disorganised approach to your paperwork means that you will miss opportunities and fail to spot any potential obstacles ahead.

8. Know the law

All businesses are subject to certain laws, and there will also be rules and regulations specific to what you do. Make sure you keep within the rules – the penalties can be huge and your reputation may never recover.

9. Get the marketing right

Understand where your potential customers are and build up a strategy to attract them – they’re unlikely to come to you. “The best strategies are usually the simplest, so when setting your marketing strategy make it achievable and ensure it fits within your budget,” says Julia Payne, co-founder of The Edge Business Club.

10 Don’t give up!

There will be obstacles and you’ll have good and bad days, but building up a new business is always going to be hard work and the biggest successes tend to come from the businesspeople who try the hardest.

Starting this month, all Barclays Business customers receiving new or re-issued cards will find that they come with contactless technology as standard. This enables them to pay for low value transactions by holding the card over a reader, without the need to enter a PIN or insert the card into a terminal.

Over six million people in the UK already have a contactless-enabled debit or credit card since Barclays became the first in the UK to begin rolling-out the technology to its personal customers in 2007. The maximum limit for contactless card transactions increased recently from £10 to £15 in line with demand from retailers and customers, widening the appeal of the technology.

Marc O’Brien, managing director, Visa UK added: said: “Barclays and Barclaycard have been leading the industry with the roll-out of contactless payment technology and we are seeing usage increase rapidly as customers realise the benefit of being able to pay for transactions quickly, securely and conveniently.

“We firmly believe that contactless is the future of payment technology. 2010 looks set to be a major year – we expect millions more customers will be issued with contactless-enabled cards with many more retailers beginning to accept the technology in their outlets.”