The latest ISME Quarterly Bank Watch Survey shows that 58% of companies who made an application to their banks in the last three months were refused credit.
The Irish Small & Medium Enterprises Association said their survey results are "at variance" with the claims by the banks and the Credit Review Office that SMEs are reducing their demand for bank credit.
ISME Chief Executive, Mark Fielding, said: "The results of today’s survey make an absolute joke of the claims of the bankers representatives and their cheerleaders in the Credit Review Office that bank lending is readily accessible but the demand for SME credit is reduced.
"This excuse, used to justify why the banks will not reach their Government lending targets, is utter baloney, being peddled to get the bankers off the hook from their commitments in return for their rescue by tax payers’ money."
The survey was conducted in the week ending September 2 and attracted 810 responses.