He said the problem with late payments is now worse than ever, with SMEs in Ireland waiting an average of 69 days for payment.
"This is the longest period on record. The main culprits are big business and the public sector," said Fielding.
The number of companies experiencing payment delays in excess of three months has increased by 42%, according to research by ISME.
The European Commission last month published an update of the Late Payments Directive which urges public bodies to settle their bills within 30 days (EurActiv 9/4/09). However, the ISME chief said swift action is needed immediately if companies are to be saved from going bust.
"The very survival of many SMEs is threatened by late payments and businesses face bankruptcy because of the changed bank lending policies," Fielding said.
There are very few signs that action at national and European level has translated into improvements for small firms, he said, with around half of all loan applications being declined by banks.
"There is evidence that many sound, profitable, long-standing businesses are finding it difficult to get access to bank credit because of the banks' perception that SMEs are a high-risk sector. These businesses are experiencing increased cash flow problems, leading to many companies letting people go, reducing operations and in many cases closing down," said Fielding.
He is calling for the government to guarantee up to 50% of loans to small companies, to reduce the risk that banks are asked to take on. ISME said this would help Ireland to "trade its way out" of the current recession.
Fielding said he is lobbying hard to ensure that European Investment Bank funding is made available to SMEs quickly and without unnecessary bureaucracy and charges.
Exports for Irish firms are "dramatically" down due to an unfavourable exchange rate between the euro and the British pound, and the relatively high cost of energy and waste charges.
