Banks that refuse to increase their lending to help small businesses with cash flow could see their profits and bonuses taxed by an angry government.

It is estimated at least £50 billion of new money could be generated by the high street banks if they cut back on dividends to shareholders and limited bonuses for bosses.

UK Business Secretary Vince Cable has accused the banks of turning a deaf ear to the cries of small and medium sized firms who claim they are finding it hard to access finance despite the insistence of the banks that they were meeting 80 per cent of requests.

In these times of difficult finance one option for businesses is to factor the book debt they carry on their sales (accounts receivable) ledger. It is a perfectly legitimate way in which to raise cash, and it can be appropriate to businesses at the time and under certain circumstances; it is not necessarily the best.

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