Small businesses are turning to long-term bank lending in a bid to boost cashflow during the credit crunch, according to research by Barclays Commercial Bank.

The bank's study found that 16% of companies with a turnover of over £1m have taken out loans of £500,000 or more; an increase of 3% on the same period in 2007.

It added that 17% had increased the amount of money they borrowed over the past 12 months while 14% said they intended to do so over the next year.

"Small firms are borrowing to capitalise on business growth opportunities and are receiving the support from lenders to do so," said Dr Richard Roberts, SME market analysis director for Barclays Commercial Bank.

"These figures go against any suggestions that UK SMEs are experiencing limited growth potential and indicates confidence despite current market conditions.

"Many UK enterprises are in a relatively strong position to borrow and this should help these firms to benefit from the upside of the business cycle over the next few years," he added.