Pictured above: Johnathan Dudley

Local Enterprise Partnerships (LEPs) need to break the log-jam on business lending, according to Johnathan Dudley, Managing Partner at the Midlands office of national audit, tax and advisory firm Crowe Clark Whitehill.

And he warned of considerable complications surrounding access to many traditional funding sources.

With banks having to meet larger capital requirements, they were being much more circumspect in who they would lend to, how they would do it and what the charges would be.

He said: "With property prices slumping collateral is reduced, there is a push towards asset-based lending because the banks say that gives greater visibility and, given the increased risks, charges have risen.

"Hence we have a real problem which is not easily addressed."

Mr Dudley said there remained many sources of finance by which companies could expand.

However the Stock Market, AIM and the PLUS exchanges were out of reach of many businesses.

Loss-making Investbx, the West Midlands virtual trading platform, was regarded as a flop in many quarters with just three firms "floated" since its launch, one of which recently pulled out.

Birmingham City Council had said it wanted to use the exchange in the future as part of plans to set up its own £10 million equity investment fund. But it remained to be seen how that would work out.

Similarly the Birmingham-based £2.5 billion equity fund set up by the major banks was in its infancy.

And the Government's £1 billion Regional Growth Fund was largely targeted on major projects.

Funds associated with regional development agency Advantage West Midlands, such as the Advantage Creative Fund, had leant millions to small firms - phase two saw £5.4 million put into 55 creative businesses - but AWM was being abolished.

The Black Country Reinvestment Society had a loan fund especially designed to meet the needs of local businesses, but despite its good work the sums involved were small.

Mr Dudley said: "Someone somewhere needs to coordinate all this, encourage those in charge and cajole where necessary.

"Complaints about the difficulty of obtaining finance continue to abound, particularly among SMEs. Bank charges are sometimes impossibly high.

"Local enterprise partnerships would seem the logical organisation to take hold of the issue and address the concerns.

"If we are going to build the businesses we need for the future and produce the jobs that are so vitally required we need to sort this out by being creative, innovative, relevant and positive."

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