The Business Secretary said that the banks had made it more difficult for businesses to apply and that they were failing to meet demand.
Market leader Royal Bank of Scotland (RBS) and Lloyds Banking Group have both stated that loan application approvals stand at more than 80pc.
Stephen Pegge, chairman of the British Bankers' Association's (BBA) small business panel, recently said the rest of the industry was hitting this rate, too.
However, Mr Cable said: "This is misleading. I think they are raising the hurdle. All the evidence from business, from the Institute of Directors and other bodies, is that banks are not lending as much as is needed."
The Treasury and the Business Department will launch a consultation this week on business finance that will discuss the merits of imposing new lending targets on the semi-nationlised banks. Mr Cable has said that "mandatory action" to force Lloyds and RBS to lend more was attractive.
However, a Treasury source said at the weekend that the Government was still considering how effective such targets were following the last government's inability to force the two banks to meet legally binding lending targets during the past year.
The discussion paper will promote alternatives to bank debt, including equity and public market instruments like covered bonds. It will also examine various tax incentives that could be used to encourage private investors to back young companies. It may also include Lib Dem proposals for regional stock exchanges.
The Government has already stated that it sees the wider use of equity finance as one way to reduce dependence on the high street banks.
Mark Hoban, the financial secretary to the Treasury, said earlier this month: "Currently, only 1pc to 2pc of small businesses use equity finance at any one time. That is a drop in the ocean and a missed opportunity for the UK's small businesses, and for our economy."
Mr Cable said in an interview at the weekend that one option could be to recreate 3i, the private equity group which used to operate a network of regional offices that provided equity and debt for small, growing businesses.
"The system is still biased towards debt and we need to find ways of getting more equity funding into business, maybe through something like the old 3i, to help growth with tax breaks or tax incentives without it being a way of avoiding paying tax," he said.
The latest statistics from the BBA show that banks lent £500m in May to small businesses but this was less than they collected in repaid debts and withdrawn overdrafts – a pattern that has been seen for more than a year.