The survey, by Red C and commissioned by the Department of Finance, also shows an increase in loan refusals among the non-pillar banks.
However, the survey notes that there has been improvements in ''turnover performance" among medium-sized businesses, which led to a small increase in those looking for finance.
The figures - which are for October last year to March this year - show demand for credit at 40%, up from 39% in the previous survey, and 38% a year ago.
The Red C study did show a "significant improvement" in the perception that banks are lending, with almost half of respondents (47%) saying that they believed this to be true, up from 39% last September.
However, most of those SMEs believe that lending is restricted to a small number of companies in certain sectors, while a "significant minority", or 6%, have not applied for credit because they believe the banks are just not lending.
Of those SMEs who have had their loan application declined, 77% said they did not agree with the reason provided, while 21% said the bank did not provide them with any reason for the refusal.
The report recommends that in order to encourage demand in the future, banks should focus on ensuring that the reasons for decline are clearly understood by the applicant.
Of the reasons given for a refusal, more than half of SMEs who were declined credit were turned down for a bank-led reason, such as a change in lending policy and because the bank was no longer willing to lend to that sector. Other company specific reasons given included inadequate repayment capacity.
The report also pointed to an increase in the conditions attached to loan approvals, with 70% of SMEs having at least one criteria or condition attached to their approval. These conditions included personal guarantees, specific security and a facility fee.
Application times also remain an issue, with the average time taken by a bank to issue a decision on a loan put at 21 days, longer than the recommended 15 days by the Department of Finance.
A "small concern" identified in the report was that awareness of the Credit Review Office has decreased.
