Once this Great Depression is said and done there’ll be a smoking gun byline left hanging in the pungent air: ‘The battle between banks and entrepreneurs’.

I cannot think of one conversation I’ve had with an entrepreneur in the last year – and we talk to a great deal – which did not include them mentioning an unfortunate episode they had with their bank. Credit refused, overdrafts removed or insane demands for personal guarantees. And credit card rates just keep going up.

One example is a leading, profitable, public, multi-million dollar turnover tech business that had a ten year relationship with its bank and a long standing overdraft. The overdraft facility was not even that big. Yet it was removed, for no reason, with almost no notice. Nonsensical.

Most recently I heard of a small, innovative pharma company that won a massive 3 year contract worth nearly $5 Million from a world leading retailer. The entrepreneur went to his bank clutching the signed contract and asked for a small extension to his overdraft. He was refused. Go figure.

I could add hundreds of thousands of like stories. Since the credit crisis began in earnest 18 months ago banks in the Western world have been battling start-ups and small businesses more than at any time in modern history. The banks, of course, will deny it. Ignorance is bliss. Mum the word. But the consequences could be huge.

First up, the Eastern world – particularly China, India and South East Asia – has not had such credit issues and has been busy financing and developing the next wave of start-ups, small businesses and their innovations at an unprecedented rate – uninterrupted. This could give them a huge small business leg over the West in coming decades.

Secondly, todays entrepreneurs have had to turn to alternative forms of financing like never before. This has led to a wave of alternative funding options, which is a positive. Micro-financing, Crowdsourced funding, alternative transactions systems and new banks are proliferating. Buzzwords such as Venture Capital 2.0, social lending and ‘local bank’ are the new cool.

But there is also a dark side. Loan sharks have never had it better. In Italy alone billions of Euro’s have been lent by loan sharks to small traders and start-ups sometimes backed by the Mafia and often sporting interest rates of 10% per month. We can all guess at what happens when you fall behind.

Third up, small businesses drive GDP growth and almost all new employment and innovation. Stifle them and you guarantee to stifle your countries future development, stability and competitiveness. Entrepreneurs have not been able to start-up or they have started businesses only to watch them whither at the vine due to a lack of available funding. All because the banks have been left to batter, bruise and turn away the very entrepreneur they should be courting.

Fourth, the Western world has bred a generation of entrepreneurs that have built their business without relying on banks and are comfortable with alternative forms of financing. When things get better these entrepreneurs may turn their backs on the very banks that scorned them. Instead they’ll back new banks, alternative forms of lending and they will have stronger balance sheets. But we will have fewer entrepreneurs and less jobs.

The long term winners of this great Western battle between big bank and entrepreneur will be the East, the strong entrepreneur, the Angel investor, new banks and alternative forms of financing. But it’s a shame that Western governments did not spot this conundrum earlier – because I fear the cost to Western competitiveness will be greater than anyone can imagine. And the consequence will be higher levels of unemployment for longer. A Western demise.

I wish the worlds media would spend more time examining this rather than endless headlines strewn with banker bonus after banker bonus. This is the real story. Let’s talk about it and get behind tomorrow’s entrepreneurs.