The figures show that UK banks wrote off £227m of lending to law firms, accountancy practices and other professional services firms last year, down from £252m the year before, and the lowest amount since 2008.

In contrast, bank write-offs of loans to other businesses increased to £5.96bn in 2014 from £5.35bn in 2013.

Write-offs on loans to professional services businesses peaked in 2009, when £320m of bank debt was written off.

Peter Alderson, LDF managing director, said:  ‘Accountants have had to take a long, hard look at their business models in the last few years to identify where vulnerabilities lay and take decisive action accordingly, through changing their emphasis on particular practice areas, restructuring their businesses or merging.’

However, Alderson suggested it remained to be seen how quickly the turnaround in firms’ fortunes will impact on boosting levels of bank lending.’

‘As professional services firms have increasingly been thinking outside the box in terms of running their businesses more efficiently and sustainably, so more and more have begun to consider how alternative forms of finance can meet their needs,’ Alderson said. 

Separately, research from the Asset Based Finance Association (ABFA) shows that asset-based finance for UK businesses  hit an all-time high £19.4bn in Q4 2014, an increase of £1.6bn on the same period a year ago, suggesting the switch away from bank funding is accelerating.

The ABFA says that this jump in the use of invoice finance and asset based lending (borrowing against the value of the businesses other assets) is now primarily driven by businesses funding growth plans rather than replacing their use of traditional term loans or overdrafts.

Businesses are now using 38% more asset based finance than at the height of the recession in December 2009, when £14.1bn was provided.