Small businesses that were hit hard by the worst of the credit crunch a year ago are starting to experience a tentative recovery, according to research by the Federation of Small Businesses (FSB).

FSB data revealed that 23% of FSB members saw a rise in trade last month, compared to 16% that reported this in February. A quarter of the firms surveyed cited the cost of finance as a major problem - down from 40% who stated this at the end of 2008.

The poll also revealed that 68% of company owners are looking to act on a rise in business confidence and plan to grow in the next six months, with firms hoping to invest in new products, more staff and marketing.

"Small businesses are naturally flexible and innovative in recessions and these figures show that despite the very many negative forces on them, they are being cautiously optimistic and are looking to expand," said John Wright, National Chairman of the FSB.