Hard-pressed businesses are losing access to revolving credit and other borrowing facilities as banks move to protect their fragile balance sheets from provisional loan commitments made when times were good and interest rates were low.

Lending managers at the major banks have been using periodic client reviews as opportunities to revise and sometimes revoke credit facilities promised to their existing business customers under better circumstances.

These loan commitments, which could include anything from credit cards and overdrafts to emergency funding lines, were in many cases made before the market dislocation took hold, yet could now cause involuntary balance sheet growth.

This would strain already depleted resources and force banks to give money out on terms that may have made financial sense a year ago or more, but bear little relation to current straitened circumstances.

Central Bank monthly statistics released last Friday confirm that changes are already having an impact on credit card borrowing by businesses.

There was a sharp 12% fall in business credit card spending from July to August. The total spend dropped from €152.9m to €133.7m, the lowest since September 2006.

Some of these contingent liabilities are irrevocable, however, and banks could have little choice but to extend more credit to businesses even as commercial revenue dries up and companies go into distress.

Multibillion-dollar credit calls by Porsche, CIT and Sprint Nextel earlier in the year put a strain on the big American banks Citigroup, JP Morgan Chase and Bank of America just as they were recapitalising after massive losses and write-downs.

Iseq-listed banks had more than €70bn in outstanding loan commitments at the end of 2007. Bank of Ireland, the country's second-biggest bank, had the largest exposure with a total commitment of over €36bn. AIB was next with nearly €24bn in pledged credit, while Anglo Irish came in at just under €10bn. IL&P had a comparatively small commitment of €646m.

These facilities do not appear on balance sheets because they have yet to be drawn down.

The banks have been curtailing loan growth for months as the cost of funding has increased dramatically and liquidity has frozen.