More firms are likely to go to the wall over the next few months unless banks start lending again, a Kent expert has warned.

Cashflow has become so dire for many small businesses that used to rely on banking finance to see them through difficult times.

But the finance has dried up in the credit crunch, with the inter-bank lending rate LIBOR well above base rate.

The injection of billions of pounds of taxpayers’ cash appears to have done little to boost bank confidence and persuade them to lend to each other and hard-pressed businesses.

Small business representatives are going to Whitehall today to urge the Government to put pressure on banks to resume lending to business.

Insolvency specialist Steve Tancock, a director with Maidstone-based Smith & Williamson, said he was seeing more firms in trouble across Kent and in a wide range of sectors.

He told Kent members of the Federation of Small Businesses at The Russell Hotel, Maidstone, that funds were being tightly rationed.

"The most common reason for failure that I think we will see in the next few months is going to be a lack of finance," he said. "It’s not that banks don’t want to do business with you now. They can’t. They haven’t got the money."

Cashflow was the main problem, he said and warned: "It is going to get considerbably more serious. I would expect that towards Christmas, you are going to see more people coming to us and saying "That’s it, we’ve had enough. We want you to shut the doors."

The only comfort he could see was that Kent was more resilient than many areas because of its proximity to the Continent, developments around Ebbsfleet, and the 2012 Olympic Games.

"That gives us a certain amount of insurance in Kent but I think that unfortunately there is still going to be a lot of pain out there before things get better." He urged firms to seek professional advice at the earliest sign of difficulty.

Roger House, chairman of Kent FSB, added: "The whole thing is quite scary. There’s a growing level of concern, money shortages, the banks aren’t parting with money. If you’re reliant on any form of liquidity from the bank, it’s very difficult to plan ahead."