The Government has been urged to increase its 80 per cent guarantee on emergency business loans for small businesses - and speed up the process.

UK Finance figures show 16,624 of the 36,186 small business finance applications for a Coronavirus Business Interruption Loan Scheme facility have been approved, with an average value of £171,000.

And while Federation of Small Businesses chairman Mike Cherry admits the figures are an improvement, he believes more should be done to help smaller firms.

He said: "We need to see far more from the banks where the speed of processing applications and making money available to the smallest businesses are concerned.

"The average value of a CBILS loan stands at more than £170,000. The small shops, restaurants, gyms, manufacturers and mechanics at the heart of our communities are not seeking loans of anywhere near this size."

And he called on the Government to provide greater security for those smaller firms.

"The Government should up its guarantee on emergency loans with values under £30,000 from 80 per cent to 100 per cent," he said.

"That, combined with the streamlined application process that should be in place for facilities of this size, should help to get more cash to the small firms that really need it."

He continued: "We appreciate many banks need to make backroom adjustments to facilitate commercial loans worth under £25,000 due to the Consumer Credit Act. It's important that these adjustments are made swiftly."

He also wants more information on applications and how many smaller firms have secured loans - or been declined.

He said: "We now need to know how many micro businesses have been helped by the scheme.

"Firms deserve to know what the application process looks like at every stage at every approved lender. Banks should also be publishing decline rates.

"We continue to hear from small firms that made enquiries when this scheme launched but have still been unable to make an application because of unresponsive customer service teams. For those that have made an application, the process is very slow."

He continued: "Equally, we've heard from exporters that have been declined facilities on the basis that the majority of their revenue comes from international sales.

"It seems this was the result of over-zealous interpretations of guidelines and we appreciate the British Business Bank's efforts to provide clarity in this area."