Struggling traders have demanded that bailed out banks "come clean" on the scale of loan refusals after a survey found more than half have been rejected for vital funding in the last few months.
Small businesses claim lenders are returning to their old habits as access to credit plunged to its worst level since the economic crisis began.
Isme, which represents thousands of small and medium-sized enterprises (SMEs), said a quarterly poll of its members revealed:
•A majority, 54pc, were refused loans in the last three months, up from 48pc at the start of the year.
•Some 72pc of businesses believe the banks are making it more difficult for them to access finance, down from 79pc.
•A total 14pc of those polled have been forced to accept a change in their banking facilities in the last three months, with most of them hit by interest rate and charge hikes.
Mark Fielding, chief executive of ISME, demanded Finance Minister Michael Noonan order the banks to reveal how many loans were being refused to smaller traders.
"The results of today's survey clearly show that the problem of reduced access to credit for SMEs has returned to the worst figures since the crisis began, contrary to the claims of the cheerleaders from the banks, who claim that credit is plentiful," he said.
"It should also be noted that a recent survey by the Central Statistics Office confirms that only 55pc of companies who applied for bank credit were successful in getting full approval.
"It is time that the discredited banks came clean and admitted their real refusal rates."
Mr Fielding said it was vital that credit is given to businesses that will pull the economy out of recession through job growth.
He said the Government should also look at alternative funding models, such as the already proposed strategic investment bank, and allowing business owners to use their own pensions to invest in their companies.
The survey was carried out among 882 respondents in the week ending June 10.