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DEMAND for credit among small and medium-sized businesses across Ireland has fallen significantly in the last three years, a report claims.

The study by Intertrade Ireland concluded that the supply of finance is no longer the most significant issue facing SMEs in both the Republic and Northern Ireland.

It said that the most pressing problems for most Irish and Northern Irish small businesses are finding new customers and addressing cost pressures. But it also points out that SMEs are over reliant on short-term bank funding, including overdrafts and loans.

The report claims the appetite for credit has been depressed due to a range of factors including a fall off in domestic demand, lack of consumer confidence and legacy debt levels.

"While the demand for credit is at its lowest level since 2010 ... there remains a concern that if an economic recovery were to gain momentum, it could be inhibited or even derailed by a supply-side deficit," the study said.