Willingness on the part of Irish banks to lend to small and medium businesses in Ireland is at its highest recorded level in almost three years as demand for financing increases.

The survey results were issued by the Irish Small and Medium Enterprises (ISME) Association today which welcomed the upturn in activity as an indicator of a path back toward “normal” banking.

It also reported a significant decrease in the amount of waiting times for decisions, which is down from five to four weeks.

Among the key findings in the ISME Quarterly Bank Watch Survey was that 44 per cent of those seeking funding were refused, compared to 52 per cent from January to March.

Demand for capital from banks is now at about 41 per cent, the highest in four years.

However, despite the turnaround, just 5 per cent of ISME members say they are happy with government intervention on lending.

"The headline results of the survey are positive and hopefully are the start of a trend bank to normal banking," said chief executive Mark Fielding.