Financial institutions are continuing to show limited signs of a greater willingness to lend to businesses, according to a survey released Monday by the Federal Reserve Board.
Overall, seven out of the 57 U.S. institutions polled by the Fed in its quarterly review of lending conditions said they had loosened standards on commercial and industrial loans to large and midsize firms. It was the second straight quarter demonstrating such an easing.
The Senior Loan Officer Opinion Survey on Bank Lending Practices, offers a window into banks' lending practices and insight into the country's economic recovery following the financial crisis. In addition to polling domestic banks, the survey also included responses from 23 U.S. branches and agencies of foreign banks.
July's survey was also the first time since 2006 that banks reported easing their lending standards on commercial and industrial loans to the country's smallest firms. Among those surveyed, 6 of 28 large domestic respondents indicated they had eased standards for such borrowers.
Nearly all those reporting loosening standards for C&I loans cited increased competition from other banks or nonbank lenders for the easing.
In addition to loosening standards, there were also signs business borrowers are receiving credit under better terms. Of seven categories for C&I loan terms included in the survey — including the maximum size of credit terms and the spreads of loan rates — a sample of large domestic banks surveyed said they had eased terms in most categories.