Sir Alan Sugar dismissed bosses of struggling small businesses as "moaners" who "live in Disney World", it has been reported.
Lord Sugar, who was appointed as the government's "enterprise champion" earlier this year, claimed just 15 per cent of companies which were refused bank loans had good reason to complain.
The rest, he said, needed an "insolvency practitioner" rather than more credit.
His comments will come as a blow to efforts by ministers to urge banks to boost their lending to smaller firms.
The Apprentice star and multi-millionaire businessman told delegates at a conference for small to medium businesses in Manchester yesterday: "I can honestly say a lot of problems you hear from people who are moaning are from companies I wouldn't lend a penny to.
"They are bust. The moaners are bust. They are bust and they don't need the bank - they need an insolvency practitioner."
He added that young entrepreneurs who had not experienced a recession until now had unreasonable expectations about obtaining credit from banks.
"Let me tell you, you lived in the Disney World - you have lived in the unrealistic Disney World in the way banks dished out money."
His remarks sparked anger from business leaders and opposition MPs.
A spokesman for the Federation of Small Businesses said: "Most small companies live in the real world, not Disney World, and they lie at the heart of our economy.
"They are not moaners, and the fact is they are working hard in difficult times and they need help from our banks."
Liberal Democrat business spokesman John Thurso told the Daily Mail: "The Prime Minister must not allow Lord Sugar's celebrity to distract him from the absolutely desperate message this sends. If he cannot get this, the Prime Minister must tell him: 'You're Fired!"'.