Louise Beaumont, co-founder of the business finance provider Platform Black, said: "The BBA is seeking to explain this away with its usual "not me guv" indifference by blaming businesses' lack of demand for loans.
"Yes, it is true that many companies are looking beyond the banks for their cashflow needs. But this is not down to any lack of demand – Britain’s SMEs are crying out for finance.
“The problem is that most high street banks can’t or won't consider lending to a business without significant assets and security which rules out most of Britain's small businesses.
"The conventional credit pipeline is badly blocked, and the BBA figures confirm that the banks' continued unwillingness - or inability - to lend to businesses has led ever more companies to seek funds from alternative finance providers.
"The banks still have a vital role to play oiling the wheels of British business, but their monopoly on lending is gone for good."
Duncan Kreeger, director of peer-to-peer lender West One Loans, agrees: “High street banks still face systemic problems at their very hearts, and non-financial businesses are the ones who are suffering as a result.
“Net finance to these businesses is still depressingly negative – and still unmoved from the average rate of deterioration we’ve seen over the last six months.
“Mainstream lenders face a double challenge of both lending more and bolstering their balance sheets. And in the meantime, scores of businesses are being held back after being turned down for lending by mainstream banks.
“But there are thankfully, some lenders without monolithic balance sheets who are picking up the pieces dropped by the high street."
