by business editor Trevor Sturgess

Banks have been accused of demanding a "kilo of flesh" for business loans despite claims that they are happy to lend.

Criticism from Kent bosses follows a week of upbeat results from banks.

Today, RBS, which is 84 per cent owned by the taxpayer, reported half-year profits of £9bn.

Earlier in the week, Lloyds Banking Group (41 per cent taxpayer-owned) revealed profits of £1.6bn, HSBC £7bn and Barclays £3.95bn.

Most said that business lending was slightly down and blamed weak demand. They all claimed there was plenty of money available for lending.

But Alyson Howard, new business development consultant to a number of professional service companies, said that if Shakespeare's fictional character Shylock were around today, he could easily be the head of a major bank.

"If you are a small business and want to grow, you'd better be prepared to guarantee any bank investment with more than a pound or even a kilo of flesh," she said.

Most small and medium enterprises (SMEs) found local bank managers helpful, but also honest about the likely outcome of a loan application.

"The result is that where the manager knows that the current criteria of credit do not give his customers a chance of succeeding, he is honest with them about it and thus they do not even get to the stage of submitting a loan application," she said.

Paul Barrett, managing director of Barretts, the Canterbury car dealership, accused banks of a "complete unwillingness" to lend.

"They are more interested in building their own profitability and, yes, they will lend you money - sometimes - but what they extract from you in terms of guarantees, fees and interest rates is ridiculous.

"Demand was bound to be weak if banks imposed such tough conditions."