Contractors and other small businesses are being held back by the slow payment processing times of banks, one expert has said.

Ed Moss, spokesman for the Manufacturing Institute, has said that British banks must catch up with those in other European countries to help out small businesses.

"Something has to be done to try to get the cash flow going," he said.

"Again, it comes back to the banks, because to get the cash flow you get a cheque, you put it in on Monday and you don't see the money until Thursday."

Mr Moss noted that in Sweden and Greece there is a two hour maximum clearance window for cheques and if banks do not adhere to these rules they are fined.

This comes after the Forum of Private Business revealed that more than 200 small business owners have backed the Get Britain Trading campaign, which raises awareness of the massive contribution small firms make to the economy.