Jane Gray, who owns Maltby Service Station, said that her broadband speed runs at an average of just 0.7 megabytes, and sometimes even drops to less than 0.5 megabytes.
This has caused problems with credit card payments and MOTs, which are now required to be completed online.
Mrs Gray said: “We do one MOT per hour, and you are only allowed a certain period of time to complete each one.
“If the connection is too slow and we need to shut down and log back in, it can create a huge backlog. If we can’t log on, then we can’t do our job.
“Customers have sometimes had to wait up to an extra hour. Other times we’ve had to ask customers to go home and come back later.”
Mrs Gray added: “The Government has promised faster broadband, but this situation is not acceptable for the modern world.
“It’s very slow compared to other countries in Europe. It’s pathetic. When I’m at home, I can’t even download a film.”
Fellow business owner Ann Graves - who runs Grange Farm Park holiday cottages with her family - said that the current situation is “dreadful.”
She said that a group of businessmen had recently decided not to book with them due to the lack of broadband at the site, and other customers have said they would not return for the same reason.
Mrs Graves added: “Our booking system is online, but it’s really poor - it takes ages. It’s disappointing and disheartening.
“Kids and adults want to use the internet on their iPads, but they can’t. It’s really bad for a tourist area, where we should be encouraging people to come. I absolutely think that more should have already been done.”
Parish councillor Philip Baildon met with Louth & Horncastle MP Victoria Atkins in December, where he presented a petition from residents pleading for a faster broadband connection.
Ms Atkins told the Leader that improvements were happening.
She said: “Rural broadband was my first campaign as a newly-selected candidate and it continues to be the focus of my attention.
“I am Vice-Chair of the All Party Parliamentary Group on this topic and we have recently made significant progress by persuading the Government of the need for a Universal Services Obligation.
“I am pleased that the Government has continued to listen to Members of Parliament from rural areas.
“The impact of our lobbying was seen in the announcement in the Queen’s Speech that the Universal Service Obligation for broadband will be extended to the remaining 5 per cent hardest-to-reach areas.
“This means people and businesses in those areas will have a legal entitlement to request fast broadband, and up to a reasonable cost threshold, they must be provided with it.
“The provision of broadband is improving across the constituency but there is more to be done.
“Rural areas need broadband just as much as urban areas and I will not stop pressing for a better deal for residents of Maltby le Marsh, Kirkby on Bain, and all other villages in a similar position.
Ms Atkins added that she will hold a ‘broadband summit’ for residents and businesses later in the year.
In the meantime, Coun Baildon has encouraged residents to contact their MP at www.victoriaatkins.org.uk to outline their concerns and call for a faster connection in the village.