The decline was largely driven by a £699m drop in net borrowing by public admin and defence companies, as well as a £463m fall in lending to wholesale trade businesses.

Borrowing by construction businesses also fell by £139m, while bank lending to mining and quarrying companies also witnessed a drop of £38m.

“While it’s disappointing to see a drop in borrowing by non-financial firms – including small businesses – there is some cause for optimism,” said Mike Cherry, national chairman of the Federation of Small Businesses.

“A record number of small firms report successful credit applications in our latest Small Business Index.

“The proportion of businesses that are positive about the availability and affordability of credit are at some of the highest levels we’ve seen in the last five years.”

The annual growth rate of 2.9% in April was also than lower than March, but higher than in recent months.

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“…The next government must do more to improve access to finance for small firms,” Mike added.

“One key issue is that small firms are not aware of all the finance options available to them – this has to change.

“The British Business Bank should be expanded and given more resources to both promote and support alternative finance providers, particularly if we lose investment from EU funding streams following Brexit.”

Elsewhere, gross household borrowing climbed 10% year-on-year in April.

This growth was boosted by a £400m surge in credit card borrowing, with an additional 3.6 million retail purchases compared with the previous month.

“As the spring sunshine picked up in April, so did consumer spending,” said Eric Leenders, BBA managing director for retail banking.

“Annual growth in consumer borrowing from the main high street banks grew due to increased customer use of credit cards.

“This was also reflected by an uplift in retail sales volumes, particularly among food retailers over the Easter period.”