Small businesses should be "more pushy" with the banks when trying to secure credit, according to a senior official with the enterprise department.
Clare Dunne, who is assistant secretary at the Department of Jobs, Enterprise and Innovation, said that while small firms might be in a position that they don't want to damage their relationship with their lender, they should be angling for the credit they need.
Her comments come as thousands of small businesses around the country face daily hurdles in accessing finance from banks despite the two main lenders having been given billions of euro of taxpayers' money.
"We need to get the message out to businesses that they should be a bit more pushy with the banks," Ms Dunne told a joint Oireachtas committee on jobs, social protection and education yesterday.
Ms Dunne also said that while she accepted there had been a decline in lending to SMEs, that the approval rate of loans to the sector during boom years -- at about 97pc -- was probably too high. She said a refusal rate of between 20pc and 25pc would probably be more realistic.
Told by some committee members that many SMEs don't bother looking for credit any more because they know they'll be refused, Ms Dunne said they should persevere.
"If I was in business and I thought I had a good idea, I would try and I would keep trying and if I got the wrong answer I would go to the Credit Review Office."
But the department official also said that the two main banks needed to be lending to small and medium-sized businesses.
"It's unacceptable for the government to have recapitalised banks and to discover that at the end of the day, they're not lending the way they should be," she said.
She said the banks claim that they have funds available but there is no demand for the money, but that industry bodies have the polar opposite view.
"Somewhere in the middle lies the truth," she told deputies and senators.