Businesses still feel the squeeze in struggle to raise money from banks

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Many small and medium sized enterprises (SMEs) are still struggling to raise money from banks, despite an agreement between lenders and the government, a report revealed yesterday.

Some 12 per cent of SMEs said they had experienced difficulties obtaining finance over the past year, according to a survey by insurance giant RSA and the Warwick Business School.

Amid the squeeze in lending, SMEs are increasingly looking to give away stakes in their companies in return for cash, as part of an emerging “Dragons’ Den mentality” , according to the report.

Tara Kneafsey, a director at RSA, said: “Confidence is a critical factor for SMEs as we approach 2012 – confidence in knowing they are protected should the unexpected happen and confidence in having access to capital to maximise growth opportunities.”