A Bradford business leader has welcomed proposed plans to increase availability of funding for small firms suggested by a Government-backed task force.

The report by a group led by Legal & General boss Tim Breedon calls for a single Government agency to support small businesses, similar to one in Germany, and for a new body to bundle together and sell loans to help small businesses gain access to finance.

It also said the Government’s Business Finance Partnership should consider investing in loan funds for small businesses. It also says large businesses, many of which are sitting on large cash piles, should do more to help smaller firms, including paying them more swiftly, and the main accountancy firms should set up a new business finance advice network.

The report said the Government needs to start cleaning up the “alphabet soup” of business support schemes to help them tap in to alternative sources of funding.

It also suggested the Government could announce tax incentives to encourage investments into SMEs.

Stephen Wright, president of Bradford Chamber of Commerce, which represents around 1,100 businesses, has backed the thrust of the task force's findings.

He said: “We agree with the conclusions in the report and some of the suggested measures.

“The need for finance is still up there as a key issue for many firms and there’s a gap between what banks are saying is happening and what many small firms say is on offer. Our own Business Enterprise Fund is a good example of successful alternative lending.”

Tim Breedon said: “There is compelling evidence that access to finance is expected to become more acute as business confidence and growth returns, whilst continuing bank deleveraging is likely to leave a significant funding shortfall.

“Whilst there is no silver bullet to addressing this issue, we have made a number of recommendations which I believe will collectively help open up alternative financing channels for UK small and medium enterprises.”

The report precedes the announcement this week by Chancellor George Osborne of his £20 billion credit easing scheme to boost lending to small businesses.

Of the predicted shortfall in business lending over the next five years, an estimated £26 billion to £59 billion will hit SMEs.