Nearly six out of ten loan applications made by small businesses in the last three months were turned down by the main banks, according to a survey by the Irish Small and Medium Enterprises Association.

ISME’s Quarterly Bank Watch Survey shows that 57% of funding applications made in the past quarter were refused, up from a refusal rate of 44% seen in the last quarter.

The survey also found that, on average, the length of time it took for a decision to be given by a bank had increased from four weeks to five.

However 14% of initial bank decisions were made within one week – a 1% improvement on the previous quarter.

More than 1,020 owner-managers of SMEs responded to the survey, which represents 14.7% of those asked.

Of those respondents, 35% had requested credit in the past quarter, down from 41% in the last survey.

ISME said that 12% of those who required finance did not apply for a number of reasons, with one third of those claiming they were discouraged by their bank from making such applications.