Independent lending trusts are tipped to become the top source of small business funding in the future, according to the head of the Aston Reinvestment Trust (ART). The organisation which has been financing entrepreneurs in deprived parts of Birmingham for ten years, says banks are becoming ever more cautious and reluctant to lend to young businesses due to the current unreliable market conditions.

ART said it had experienced an upsurge in interest in the last six to nine months, as banks were prepared to take fewer risks on new firms. Chief executive of ART Steve Walker said, We have seen an upsurge in interest and demand for our services in the last six to nine months and Im only expecting that to increase as the banks show they are going to take fewer and fewer risks, particularly in the early and start-up stage of business, he said.