Small business activity is showing signs of recovery as high street lending to small companies rose by £271m from February to March, according to figures released by the British Bankers' Association (BBA).

The BBA also revealed that deposits from small companies increased by £881m. These figures contrast positively to figures from the downturn of 1990 and 1991 where start-up activity decreased more rapidly.

“So far we have not seen the contraction in start-up activity we would expect given the scale of economic slowdown,” commented Doctor Richard Roberts, head of research at Barclays Bank.