Banks are being accused of stifling the potential for growth in independent c-stores by placing unreasonable restrictions on loan applications.

While national retail chains have the cash to buy up prime neighbourhood retail sites, a new report from The Institute of Chartered Accountants in England and Wales (ICAEW) claims that many small businesses are unable to borrow from banks because their lending criteria are too restrictive.

ICAEW also says bank fees and costs for small businesses have risen in the past year.

Association of Convenience Stores (ACS) chief executive James Lowman said: "Over the past two years it has become clear that the banks are not supporting local shops with lending to promote investment and help with cash flow. We need banks to start making sensible lending decisions to promote the growth of our sector."

Thomas Parry of the Forum of Private Business added: "We have been arguing that viable smaller firms are being unjustifiably denied credit, or offered it at an extortionate cost, by risk-averse banks which often don't understand their needs."

ACS is collecting retailers' views on the banks' attitudes towards lending, and will respond to a government consultation on action to ensure banks make reasonable loans available to businesses.