A survey carried out by small business group ISME shows that more companies were successful in securing loans from banks in the last three months.
But the group's quarterly bank watch survey also shows that the number of companies asking for new loans from banks has fallen.
ISME claims the fall in the number of firms approaching their banks means that a large number of companies are reticent to approach their banks because of fear of refusal. The survey also shows that the cost of loans for companies has risen, along with an increase in collateral pledged to the banks.
33% of the companies which applied for funding in the last three months were refused credit by their banks, compared with 42% in the previous quarter.
68% of firms said that the banks are making it more difficult for them to access finance. This is an improvement on 83% in the September survey.
62% of applications for new loans attracted higher interest rates, while 42% were required to commit greater collateral. A total of 724 companies took part in the survey.
ISME chief executive Mark Fielding called for the Government to become directly involved in lending to small businesses through the creation of a specific business lending bank, similar to ICC.
He called for a 'third force' comprising EBS, Irish Nationwide, Irish Life & Permanent and what remains of Bank of Scotland (Ireland), 'using their business lending expertise and branch network to set up a specific bank for business lending'.
