FPB member and accountant Khalid Javid slammed the recommendation to limit the SFLG scheme to less established firms.
Mr Javid said: "A client of mine, who has run a fruit and veg shop for 10 years, is presently applying for the SFLG scheme.
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Teresa Graham's recommendations will ensure the future SFLG will maximize its impact on our enterprise agenda and help those SMEs with greatest difficulty in accessing debt finance.
The SFLG was introduced to help individuals overcome the problems obtaining the finance to start up new small businesses and also help small businesses expand.
I have asked the Small Business Service to work with the British Bankers' Association, the high street banks and other SFLG lenders to determine how best to successfully implement the recommendations and we will make a further statement later at the time of the Pre-Budget Report in the autumn.
For more than 20 years the SFLG
has been the principal method through which the government assists businesses in securing bank loans.
An ACCA members' survey earlier this year found that 51 per cent of respondents believed the SFLG
to be unsuccessful in meeting its objectives.