SMALL firms in East Lancashire are being starved of the investment they need to expand, accountants have warned.

A survey found that almost a quarter of firms employing up to 50 people said difficulty raising finance was holding them back.

Diane Eatough, the Blackburn-based president of the North West Society of Chartered Accountants, said the big banks had remained cautious since the collapse of property prices in the late eighties and early nineties as a large amount of lending was secured against bricks and mortar.

"They got their fingers burned and the fear of it happening again means small firms and new businesses are being frustrated. People with a good business idea really struggle to raise even small amounts of capital.":

Mrs Eatough said small firms faced a further disadvantage by being unable to interest the large providers of investment capital and were often reliant on friends and family for the money they needed.

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