By Helen Geraghty

The Kent-based boss of the Institute of Directors today raised concerns that businesses are still having difficulty getting finance from banks.

IoD director-general, Miles Templeman, was commenting on an IoD survey which showed that one in three firms applying for finance in the six months from January to June were turned down by their bank

Mr Templeman, who is also chairman of Faversham brewer Shepherd Neame, said government efforts to make borrowing easier for business may not be working as intended.

He said: "Although there is clear evidence of a drop in decline rates we're still concerned that access to finance for businesses remains difficult.

"The survey indicates that some access problems relate to lending criteria becoming more restrictive with regard to the amount of security requested by banks. This raises a question about the functioning of the Government's Enterprise Finance Guarantee scheme.

"The IoD would like the Government to clarify the relationship between the state-backed guarantee scheme and bank requirements for personal security.

"We continue to hear from IoD members who've had 75 per cent of a loan underwritten through the EFG but who are still required by their bank to put up personal securities equivalent to over half of the loan.

"We remain convinced that the best way to improve access to finance in the longer-term is getting a lot more competition into the banking sector.

"Only when firms can choose more easily where they can place their business and switch banks will we have a banking sector that is better focussed on the needs of business customers."

The IoD represents directors in many kinds of businesses and has 45,000 members in the United Kingdom and overseas.