Tuesday, February 9, 2010

Latest Federal Reserve Board Surveys Reveal Continuing Improvement in Business Lending Conditions

For the second consecutive quarter, the Federal Reserve Board January 2010 Senior Loan Officer Opinion Survey reflects continued improvement in loan demand and loosening of loan standards, for businesses of all sizes. The largest domestic and foreign-owned banks reported easing loan terms, especially to large and middle-market businesses. These banks cited more aggressive competition as a key driver for easing loan maturities and loan spreads. (Click on image to enlarge.)
On the demand side, improvement was driven by a shift away from non-bank lending sources as well as an increase in merger & acquisition and accounts receivable financing. The Federal Reserve Survey of Terms of Business Lending, conducted once a quarter, collects loan origination data from 500 US commercial banks for a one week period. December’s survey shows a slight uptick in new loans, but volume remains substantially below historical averages.
Although the FRB surveys cited above show improving demand for new credit, C&I and CRE outstanding balances continued their month over month decline in January 2010 as borrowers pay down balances and banks ratchet down credit lines.

1 comment:

  1. Small to Med sized business face a tough time to get a loan to inject the much needed capital into their businesses, it is good to know that the loan restrictions are easing a bit so that more businesses can survive. Company Formation