Banks have been urged to step up support for small businesses in the wake of a poll showing half of smaller enterprises across Kent and south east have suffered a drop in trade in the run-up to Christmas.

The survey by the Federation of Small Businesses (FSB) reveals that 62 per cent of businesses in the region saw their trade fall over the last two months.

The poll also reveals that more suppliers are delaying payment times, with 37 per cent of small firms seeing a widening time gap between when they send in their invoice to receiving full payment.

These problems have forced more than a fifth (22 per cent) to cut their workforce, with a further 31 per cent predicting they will have to lay off staff if the economic squeeze worsens.

Despite measures in the Chancellor’s Pre-Budget Report designed to help small businesses, only five per cent of business owners felt significantly more optimistic. Just over a quarter - 26 per cent - felt significantly less optimistic.

Roger House, chairman of the FSB for Kent and Medway, and the FSB south east policy unit chairman, said: "These figures demonstrate just how serious the situation is for small businesses.

"The latest cut in the interest rates announced by the Bank of England are a very welcome boost to the market place. Crucially the banks now have to pass this cut onto their customers and lend at a fair rate to small businesses.

"Scrutiny of the banks is crucial over the coming months. Through our membership of the South East Economic Delivery Council, we will be pressing our regional minister Jonathan Shaw to ensure that banks play their part."

Meanwhile, NatWest and RBS, which have already guaranteed small business customers’ overdraft agreements and pricing until at least the end of 2009, have set up a helpline for small businesses.

Their Business Lifeline promises advice and support via a free phone service manned by specialist business bankers working with regional managers. The banks are also sending customers a guide "Trading through the Economic Downturn".

Peter Ibbetson, chairman of small business for RBS and NatWest, said the bank genuinely understood the challenges businesses were facing "and we are responding with measures we believe will offer further support and reassurance at a time when they need it most".