A Bradford business leader has praised a leading high street bank for pledging to lend more to small firms at a time when companies are facing increasing cashflow problems.

Barclays is to increase lending to UK small firms by £1.5 billion next year. The bank has so far loaned around £15 billion to small businesses in the UK, making it one of the leading providers of funding to businesses with a turnover of up to £1m.

The bank is also to allow small firms. free use of its award-winning CreditFocus credit checking service, whether or not they are a Barclays customer. This enables users to check the credit worthiness of up to five customers or suppliers.

Amanda Shepherd, Barclays local business regional director in Yorkshire said: “This is great news for Bradford businesses and means we can increase our support with business lending and help small businesses manage their credit risk.

“We have already seen high levels of business activity within the Bradford team this year and this confirms my belief that Bradford is a hot bed for entrepreneurs who have some great ideas and winning formulas.”

Balbir Panesar, president of Bradford Chamber of Commerce, which represents around 1,100 mainly small businesses, welcomed the Barclays move but stressed that lending must be at reasonable rates.

He said: “Any decision to find extra lending to small and medium-sized businesses at this time is welcomed.

“There is now increasing evidence of more companies facing cash-flow difficulties and facing late payments from customers and the ramifications of that are all too obvious. It will affect investment, recruitment and wage settlements and so help and support for companies in a range of areas is going to be more important than ever next year.”

Amanda Shepherd said Barclays remained committed to lending to and supporting business customers.

She said: “We have a history of working with business owners through highs and lows, and that support will continue. The commit-ments are aimed at helping SMEs cope with the difficult environment.”

Barclays said it was also working closely with the Government to develop the new Small Business Finance Scheme. The bank intends to use this scheme early in 2009 to support individual business loans of between £1,000 and £1m.

Amanda Shepherd said offering free use of the CreditFocus service would help tackle late payments and bad debts, which were two of the main causes of business failure.