SMALL businesses are facing increased pressure from banks looking to rein in their lending.

Blackburn carpet company Leo's suffered when the bank pulled the plug on funding after wrangles over an agreed debt limit.

The company is now being sold as a going concern.

But for other local businesses the current climate is causing them to steel themselves against a possible drop in consumer spending.

Accrington furniture store JW Tasker & Son, based at Queen Mill, has 32 employees and has been based in the town for 112 years.

Managing director Ivor Lefton said the current economic strife was a concern, but he was sure they were well placed to ride it out.

He said: “It is quite challenging at the moment but we are finding that people are actually shopping at the better end of the market and therefore we are managing to get through it.

“I think there could also be an issue of people having money in the banks and instead of watching it disappear they are thinking they should spend it.”

Mr Lefton said the company was aided by the fact it owned all its properties and he claimed its banking with Yorkshire Bank – not one of those aided in the bail out – was also a plus point.

He added: “We are stable and not looking to risk that for another one per cent of interest in a foreign account. I’d never even heard of some of those Icelandic banks.”

John Green, chief executive of Pierce, the Blackburn-based business and accountancy group, said the banking crisis was proving a major stumbling block for some businesses, but for others it had also offered a number of opportunities.

He added: “For a larger firm with a good turnover and profit, healthy debtor book and a solid business plan, there may be opportunities to grow through acquisition.

“As a worst case scenario, a number of businesses could fail in the current economic climate, some through no fault of their own.

"This means there are some good opportunities out there for companies looking to expand by acquiring a business from administration.”