Simon Llewellyn set up his hot sauce company, Hot Diggidy Dog Ltd, three years ago.
The idea to start his own business came when he was abroad with the armed forces. A chance tasting of a chilli sauce provided him with the inspiration to create his own and now he sells to a number of stockists including one large supermarket.
Mr Llewellyn says his Barry-based business is thriving and wants to expand so he can take his product overseas. The only thing stopping him doing so is money. He says he has approached his bank manager for a loan but was turned down.
Mr Llewellyn says he has an impressive list of orders but cannot do anything about them because he does not have the money to take on new employees or buy the amount of produce he needs.
A recent study by the Forum of Private Business (FPB) found that two thirds of small businesses had either reported that they or other firms within their network had received signals from banks they were not prepared to lend.
Phil McCabe, a senior policy advisor with FPB, said one reason was because banks have changed their approach when assessing the level of risk a business has.
Mr McCabe says that old-fashioned bank managers who built up relationships with clients in their areas and were able to judge risk on a case-by-case, more 'accurate', basis are becoming less common. Instead, he says, banks are using an automated, over-sensitised risk criteria which means that the money is not getting to the businesses that deserve it.
The FPB believes these factors mean less and less businesses are approaching banks for help.
Mr Llewellyn believes the only way he will be able to expand his business, if banks refuse to lend, is to sell a proportion of it off.