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Loans for small businesses were hard to come by in 2009 and 2010, this according to a new survey released by the Small Business administration. Experts say business loans will improve along with an increase in GDP, which follows similar patterns in past recessions. See the following article from The Street for more on this.

Bank lending to small businesses continued to decline in 2009 and 2010, but there were some signs of stabilization, according to the Small Business Administration.

Lending to small firms fell by $43 billion, or 6.2%, to $652.2 billion, compared with lending to large firms, which fell by 8.9% during the June 2009 to June 2010 period, according to a report issued Thursday by the SBA's Office of Advocacy.

Small-business loans are down 8.3% from the 2008 height of $711 billion, the report said.

The overall pace of borrowing and lending for the small-business market was much weaker than in the previous year. Large banks were particularly closefisted with their money, representing a significant portion of the lending decline, the report said.

The SBA compiled data for its latest report, Small Business Lending in the United States, 2009-2010, from information gathered by the Federal Deposit Insurance Corp. through call reports through June and Community Reinvestment Act reports for 2009. Small-business lending is defined by commercial real estate and commercial and industrial loans under $1 million.

As gross domestic product improves, business lending is likely to follow the pattern seen in past recessions, where commercial and industrial lending rose only after a recovery was well underway, the SBA said.

"Businesses and lenders continued to exercise caution in borrowing and lending through 2009-10," Winslow Sargeant, the SBA's chief counsel for advocacy, said in a report. "As the economy improves, this study, through its state-by-state display of lender performance, can help both small-business borrowers and lending institutions see where small firms are beginning to find the capital they need."

Business loans between $100,000 and $250,000 fell by 9.4%, while loans between $250,000 and $1 million dropped by 7.3%, the report noted. Overall, loans between $100,000 and $1 million fell by 7.7%, to $492.9 billion, it said.

Banks with $50 billion or more in assets accounted for nearly 40% of all small-business loans outstanding, the report said.

Lending to the smallest firms, regarded by loans under $100,000, began to stabilize in 2009-10. Micro-lending fell by just 1%, vs. a 5.5% decline in the 2008-09 period. Real estate loans accounted for the entire decline, the SBA said.

CRA lending dropped by 30.2% in 2009, to $205.7 billion.

This article has been republished from The Street. You can also view this article at The Street, a site covering financial news, commentary, analysis, ratings, business and investment content.