The credit crunch is loosening, the Bank of Canada says, but it appears to be taking longer for loan-seeking small businesses to benefit.

According to the bank's quarterly Business Outlook Survey of business executives, fewer firms had a tougher time borrowing money in the fourth quarter. However, the bank added, “responses suggest that improvements have been modest and have been concentrated among large firms.”

Ted Mallet, chief economist for the Canadian Federation of Independent Business, said his group's monthly survey of small and medium-sized businesses suggests their credit situation remained stagnant over the past year.

“We've found it to be not great, but not getting better or not getting worse,” Mr. Mallet said.

According to the CFIB's survey, 45 per cent of small and mid-sized firms say they have all the credit they need and 22 per cent say they have “most” of the credit they need. Sixteen per cent say they have “some” credit, while 4 per cent say they cannot get any credit at all. The remaining 13 per cent say they do not need credit or are self-financing.

Certainly, he said, complaints about the banks' reluctance to provide loans is a common refrain for small business owners, some of whom are now emerging from “survival mode” and looking to expand once again. “Now that they're seeing some light at the end of tunnel … more of them are starting to look at expansion plans to service demand that they feel is there. And they are having trouble convincing their banks that demand is there,” Mr. Mallet said. “That's the nub of the issue.”

His advice to small firms frustrated by reluctant bankers? Stick with it.

“The businesses that do best with their financing arrangements are the ones that have educated their banks on what their business is all about,” he said. “You have to be persistent.”

Douglas Porter, deputy chief economist of BMO Nesbitt Burns, said the bank's survey suggests the country's credit situation was rebounding even for small businesses. Admittedly buried in the central bank's report, he said, is the fact businesses say the flow of credit is starting to improve for firms that rely on domestic chartered banks – where small businesses tend to get their loans.

“I suspect even for small businesses we are worlds away from the conditions that were in place a year ago when things were tightening as harshly as I think any of us had ever seen,” Mr. Porter said in an interview. “... We're at least on the road back to normality.”

Shelina Mawani, sales and marketing director with Nana's Kitchen and Hot Sauce Ltd. in Surrey, B.C., said the sauce and frozen samosa maker is planning to switch from VanCity credit union to a chartered bank so it can expand into the U.S. market. (So far, the company has relied on the credit union and financing from the federal government's Business Development Bank.)

“It is tight. ... It is hard,” Ms. Mawani said.

But she added that she doesn't anticipate any major problems as the business negotiates with CIBC and other banks: “We've grown a lot of the last 10 years and it is time to move to a chartered bank.”