The proportion of small and medium-size businesses refused loans has leapt from 5.6% in 2007 to 20.8% in 2010, according to data reported by the European Commission this week.
The position in the UK is much more serious than in almost any other country in Europe. Loan denials have risen in every country with the economic crisis.
"A scary thought: the proportion of loan denials is especially high in the UK, and higher than in all other major western countries other than the Netherlands. The concern is that this Chancellor, once again, is doing too little, too late," said economist David Blanchflower.
"So, when will loans to SMEs start to improve? My suspicion is not for a very long time and this will slow growth further," he said.