The Ernst & Young ITEM Club predicted a 4.6% fall across this year with lending going down to £429 billion.
That rate of contraction would be slower than the 6.1% dip recorded for 2011 but the think-tank suggests corporate loan books will not be back to the levels seen in 2008 until at least 2016.
There was also a warning that SMEs may continue to find it tough to access finance.
Carl Astorri, senior economic adviser on the report, said: "The good news is that 2012 is likely to be the last year of such marked deleveraging in the UK; the bad news is that, once again, SMEs will bear the brunt of it.
"Government schemes to increase lending may help a lucky few but, as banks are encouraged by regulators to store up more capital and to look again at their forbearance policies and so-called bad-loan books, most small business are going to continue to feel the squeeze."
However, the ITEM Club's outlook for financial services research does give a brighter forecast for the future.
It suggests bank income and assets are going to be more stable in 2013 with moderate growth predicted from 2014.
The profits of insurance companies are expected to start to recover in 2013 while there is also an expectation of mergers and acquisitions in that market.
The combination of low interest rates and smaller volumes set against higher hedging costs and capital requirements make it more likely firms will look to takeovers to achieve growth.
Mr Astorri said: "There is significant over-capacity in the insurance market. Insurers will be struggling to achieve top-line growth through any means other than M&A and so we expect deals to continue."
The ITEM Club also said there was little evidence yet the Funding for Lending Scheme, introduced in July, has helped to lower residential mortgage costs.
Separately, BDO's 2012 Global Ambitions Report, based on opinions of chief financial officers from mid-cap companies, showed 82% were optimistic about international expansion plans.
The Lloyds Bank wholesale banking and markets business barometer also recorded a six-month high in the number of companies feeling optimistic about the economy.
