A BANKING scheme set up by the county council offering loans to small businesses has left shopowners frustrated.

Essex County Council set up its Banking on Essex service alongside high street bank company Santander to help supply small businesses in the county with small loans.

It cost the council around £380,000 to set up and was backed by £100million to help with the distribution of loans, and even advertised on national TV.

But business owners have complained about the costly scheme, with some saying they would have been better off going to a bank directly.

John Young, who owns In2Crafting, in the Ladygate Centre, High Street, Wickford, applied to try to get a £25,000 loan via the scheme to help his shop move into bigger premises in January.

Mr Young’s business already banked with Santander and had hoped to secure a quicker loan.

But after originally being told he would get a decision within two weeks, Mr Young was left hanging on for a reply for a further week before eventually being told he had to resend all his paperwork, with plans and financial statements.

Despite doing this he was again told his application had been lost and this led to him taking up an offer from Barclays.

Mr Young complained to the council about how disgusted he was with the system.

Mr Young said: “This scheme was set up to help small businesses to expand and yet it is failing dismally, and I just wish I had not wasted my time.

“Anything the council can do to support business in Essex is good and the concept of this is a good idea, but the actual process has left a lot to be desired.”

A spokesman for the county council defended the scheme.

He said: “Banking on Essex has lent over half a million pounds to local businesses since the scheme began in December 2009. This has helped small businesses across the county survive the recession and continue to grow.

“Essex County Council is constantly looking at how the scheme is working and will ensure the needs of our customers are being met.”