East Anglia's major banks have been told to 'stop holding back growth for the whole region' by shoring up customer service and building a closer relationship with small businesses to improve their access to finance.

More than 60 business owners and the region's eight MP's told the major national banks at a banking summit in Mundford, near Thetford, yesterday, to improve their communications by introducing more relationship managers and giving clear reasons to a business when a finance deal collapses.

But representatives from the banking sector, including HSBC, Barclays, Lloyds TSB, RBS and Santander, painted a more positive picture by stating that lending to small businesses across the east had gone up by 5pc compared with the previous year.

The East Anglia Banking Forum event, hosted by the Federation of Small Business, showed some positive signs for business compared to the atmosphere at the same event last year. But Peter Martin, the regional treasurer for the FSB, said 50pc of business funding applications were still being rejected.

He added: 'We would like banks to have a greater relationship with their customers. Actually having a relationship manager on the commercial side means that the bank gets to understand your business rather than just asking for money from them.

'As part of that because they know more about your business, they will be more receptive to the right level of funding for the business.

'At the present time banks are rejecting 50pc of all applications for funding, which is holding back growth for the whole region because firms are not getting the funding they need to expand their business.'

During the summit, some businesses highlighted how working with a relationship manager at a major bank had helped them the gain the advice they needed to grow their company last year. But others called for clarity over problems associated with interest swap deals, the need to force big businesses to pay smaller firms more quickly, and whether it would benefit businesses to set up their own community bank.

James Cliffe, divisional director at Barclays, said it was already building relationships with small businesses via seminars and lending clinics.

He added: 'I see our role as one to support business and to help boost business confidence. A number of the things that we do are linked to providing entrepreneurs with information, with education, to help them grow their business.

'Recently, we have been running lending clinics on exporting in conjunction with UKTI and seminars on driving business growth.

'Across the country we have had 37,000 entrepreneurs attend those seminars so that is a way of us supporting small businesses and encouraging them to grow their confidence levels to take their business forward.'

Meanwhile, Peter Ibbertson of Royal Bank of Scotland felt banks were being supportive, but trust still needed to be rebuilt.

He said: 'There is one challenge we face and that is confidence. The number of applications for loans has gone down. So it's now about rebuilding that trust and confidence.'

But Elizabeth Truss, south west Norfolk MP, who chaired the meeting, wanted to see businesses use alter-native funding streams to banks.

'I would like to see new banks enter the sector and new forms of finance,' she said.

'One of the things we had today was an equity investor talking about how they can take a share in a business and provide finance.

'We would like to see more forms of finance available to local businesses. In terms of the big banks, clearly they are the main players in the market, and what we want to see is better relationship with the customers, customers not being fobbed off and clear reasons being given if they don't receive a loan.'

Darren Jenkins, owner of Attle-borough-based The Little Car Clinic, said his businesses had struggled to get finance, despite seeing his turnover increase by 127pc.

'The government says small businesses are the future, so if the banks want our help, then they need to us give what we need,' he said.