Almost a third of Irish SMEs have never changed their bank, according to a new survey by Close Brothers.
Reasons cited by respondents include a lack of time to review financial strategy, being unsure of the options and fear of being penalised by their current provider.
Irish Small and Medium Enterprises Association (ISME) chief executive Mark Fielding told the Irish Independent that he wouldn't be surprised if the true figure was higher than that revealed in the survey.
Mr Fielding encouraged SMEs to consider alternative sources of finance, such as peer-to-peer lending. He said ISME surveys have consistently found a reluctance on the part of some businesses to change lender.
"The issue was always that the devil you know is better than the devil you don't," he said.
"The other issue is that many of the businesses wouldn't have been au fait with invoice discounting or anything other than straightforward up and down banking."
Mr Fielding said that with peer-to-peer lenders like Grid Finance and Linked Finance entering the market, "there's a bit of education to be done".
"The likes of Linked and Grid will do a great service to the economy and to small businesses in particular because they've made it easier to get finance, with less hassle, less delays.
"While we've noticed that the level of refusal has dropped by the banks in giving money, the delay has increased dramatically." Peer-to-peer lending works by having companies advertise the fact that they're seeking to raise money through platforms provided by the likes of Linked Finance and Grid Finance, once the platform has carried out background checks and is satisfied that companies will be able to repay their loans.
Members of the public can then bid to be part of the loan by outlining how much money they are willing to lend, and at what interest rate. The platform sorts through the bids to find the cheapest loan for the company.
Peer-to-peer lending is not currently regulated by the Central Bank. Grid Finance chief executive Derek Butler told the Irish Independent that his company wants regulation introduced to give borrowers, lenders and the general public confidence in the model.
"We're engaging actively with the Department of Finance, the Central Bank we know are putting in place a position paper, but really what we're looking for the Central Bank to do is roll out a roadmap for a regulatory regime," he said, adding that "we think that should happen in 2015."
Mr Butler said arrangements need to be put in place for managing the loan books of peer-to-peer lenders in case they go bust.
The British government has made a series of investments in peer-to-peer lender Funding Circle in order to help provide alternatives to bank finance for SMEs.
The idea was that the government money would form a certain percentage of loans approved by Funding Circle.