Contractors and small businesses that need financial assistance must be persistent if they want to secure a loan, one expert has said.

Sara Rizk, editor of Startups.co.uk, said that finance is tight for small businesses at the moment and this has been the case since the start of the economic downturn.

She said that it is difficult to secure a loan when the collateral is not present to back it up, but contractors should continue to adjust their business plan according to feedback.

"Remember that just because one bank manager says 'no', doesn't mean to say another bank manager would. Even within the same bank, it could just be a different branch. You've got to keep trying," she advises.

This comes after Richard Sorsky, money advice co-ordinator at the UK Insolvency Helpline, said that too many people are taking out credit without really understanding the consquences of the interest rate.