Bank lending to small firms has increased by 10% during the 12 months to September 2008, according to the British Bankers Association (BBA).

The BBA claim that lending to small firms has risen to a figure just under £45bn. The association added that lending increased by £1bn in the third quarter of the year, and that the amount of money being borrowed has risen by 4% to over £9bn.

These figures are released days before Alistair Darling's pre-budget report, which is expected to impose tough new rules on financial institutions to encourage them to lend to small companies.

Banks have been criticised for failing to lend to small firms, even after receiving a £37bn bailout by the government.