DSL Business Finance, the not-for-profit business support agency based in Glasgow, yesterday said the value of its loans had more than tripled over the past five months as a direct result of the credit crunch.

DSL Business Finance, the not-for-profit business support agency based in Glasgow, yesterday said the value of its loans had more than tripled over the past five months as a direct result of the credit crunch.

The group, which provides unsecured loans to small businesses that traditional banks are unlikely to lend to, said that while lending to businesses has "virtually come to a standstill around the world", Scottish firms are turning in increasing numbers to DSL Business Finance.

DSL, which runs a £1.5m loan fund, said it had issued £50,500 in loans to small and start-up firms in May, but by September that monthly figure had jumped to £160,000.

It also said that the average value of a DSL loan jumped from £11,000 last year to £21,000 this year, and that during the five-month period, it had approved more than £480,000 worth of loans.

Eunice Lancaster, general manager of Govan-based DSL, said the group - considered to be an ethical lender because it has no shareholders, takes no profit and pays no bonuses to staff - remained in a strong lending position in spite of the credit crunch, and that it will continue to lend to businesses without security thanks to the government-backed Small Firms Loan Guarantee scheme.

Lancaster said: "We are seeing a big increase in the number of small firms coming to us for financial assistance because the banks just aren't lending to them at present.

"They are victims of the credit crunch and many have nowhere else to turn. Businesses are also asking for a lot more money as they are worried about being able to raise finance in the future."

DSL, which has helped more than 600 businesses across the west of Scotland to create 2000 jobs with £7m of investment, recently expanded into Edinburgh as well as east and central Scotland.