This figure of 24% was down from 49% last year when high inflation rates and utility bills were putting enormous pressure on small businesses.

The most likely cohort to be experiencing high levels of stress were business owners in London and the southeast, aged between 25 and 34, and predominantly female, found a survey by Purbeck Insurance.

Those affected by mental health issues were more likely to need new finance within the year to support cashflow and almost a third (31%) had taken out personal loans to fund their companies.

The survey also found that 25% had withdrawn from a loan because it had personal finance attached and 13% of them had declined a business loan in the last two years.

Todd Davison, managing director of Purbeck Insurance said: ‘Although the cost of living crisis appears to be easing, the cost of doing business crisis has escalated in the past year, not least the cost of servicing existing loans.

‘Those who want to refinance or access new funding are facing demands from lenders for personal guarantees for loans as small as £5,000 or £10,000. This can ramp up anxiety levels and as our survey has shown, some people rather walk away than make that commitment.’