A sign that small business is finding conditions tough is that the number of complaints from SMEs to dispute resolution services about their lenders has increased. The Financial Ombudsman Service this week issued a circular to banking members advising that it is receiving more disputes from small businesses complaining about the way their financial service providers are handling requests for assistance in dealing with financial difficulty.While lenders have made efforts over the past couple of years to improve the way they deal with consumers experiencing financial hardship, it appears that the same cannot be said when it comes to small business customers.According to the FOS, common disputes concern the cancellation of a business facility upon request for assistance, demand for immediate repayment in full or unreasonable timeframes for repayment.Other disputes have concerned the reasonableness of a lender's decision to appoint an investigative accountant, and the application of increased risk margins and higher interest rates upon application for assistance.The FOS circular said: "Where a financial services provider takes such action without first giving consideration to a request for assistance, then this conduct could have the effect of seriously prejudicing the small business's ability to operate as a going concern."The FOS circular emphasised that the ombudsman does have coverage of small business disputes and included guidance on how the ombudsman expects financial institutions to assist small business customers. It said: "There is some confusion as to whether we have jurisdiction in relation to small business financial difficulty disputes where the facility limit exceeds the applicable monetary limit."In assessing whether we have jurisdiction to consider a claim about financial difficulty lodged by a small business, we will consider the amount of the loss that is claimed. The account balance or facility limit is not relevant when assessing jurisdiction."On January 1 revised FOS terms of reference took effect. One of the changes was an increase in the claim limit from $280,000 to $500,000.The FOS will also take on disputes involving demands made under a personal guarantee for a small business loan.The circular said financial service providers were required to have a higher level of information for businesses than for individuals if they were assessing a request for financial assistance. Such information would include a current business plan, cash flow statements and projections, and inventory management records.The ombudsman said: "If the small business is unable to demonstrate ongoing viability based on reasonably tested information, then we would not expect a financial service provider to accept further risk."A financial service provider should be able to demonstrate that it has genuinely considered whether providing assistance by way of varying an existing contract will allow the small business to continue to operate as a going concern in the long term."In assessing whether the lender demonstrated genuine assistance, the ombudsman would look at whether the small business was referred to government agencies or small business agencies that provide assistance.