Small business owners are pawning personal belongings such as watches to pay wages and to buy stock as banks tighten their access to short-term credit, according to the boss of Britain’s biggest pawnbrokers.

Chris Gillespie, the chief executive of H&T, said there had been an increase small business owners pledging valuable items to secure working capital and that the trend was expected to continue. “It’s clear they find it difficult, at times, to access credit,” he said. “Any small business with a working capital need has restricted access to bank funding.”

While these business owners represent only about 1 per cent of H&T’s customer base, they account for the majority of loans of £5,000 or more. The trend contributed to a 12.5 per cent rise