The Irish Small and Medium Enterprises Association has called on the Government to investigate the ''inordinate delays'' in getting a decision on bank loans for SMEs.
A new ISME survey shows that some companies are waiting for up to eight weeks to get a decision on a loan instead of the 15 days as set out in the Code for SME lending.
ISME's latest quarterly bank watch survey show a 53% refusal rate for small and medium sized businesses seeking loans from banks, up four points compared to the last survey.
The bank watch survey also shows that while 28% of initial bank decisions were made within one week, the average wait was four weeks. It took another four weeks, on average, to get permission to draw down the loan.
Of the total credit applications, 53% were requests for overdrafts, while 44% were for term loans or alterations to existing facilities. The survey also noted that 46% of respondents had increases in bank charges imposed on them by the banks.
94% of respondents stated that the Government was having either a negative or no impact on SME lending, down from 96% in the previous quarter.
''The Government, in last week's Budget, acknowledged the importance of the Small and Medium Enterprise sector and introduced measures to assist. The Government must now demand that the bailout banks meet their own commitment to SME lending,'' commented ISME's chief executive Mark Fielding.
He said that ''despite assertions from the banking PR machine, access to credit is abysmal, the application process is getting more torturous and businesses are not being told their rights under the code''.
