Data out today from the Bank of England’s Money and Credit statistical release shows loans to financial and non-financial businesses decreased by £37.7 billion in December, compared to the average monthly decrease of £8.0 billion over the previous six months.

The 12-month growth rate was -3.5%. The decrease was mainly in loans to businesses in the financial services industry (£35.9 billion).

James Meekings, co-founder of Funding Circle, said: “These disappointing statistics are a stark reminder of the work that still needs to be done to increase business lending. In the time that banks have stopped lending to small businesses, technology has stepped in to offer a faster, fairer and more transparent way to access finance.

“The internet economy already makes up 8% of our GDP, and has already disrupted and transformed industries such as travel and music. There is no doubt that technology is now in the middle of changing financial services for good, and it will be this – rather than more of the same – which will ensure Britain sees a sustainable economic recovery with small business very much at its heart.”