The Federal Reserve recently released its quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices. Results show that there was some easing on lending standards and terms for C&I loans to large and middle market firms. Regarding all respondents, the percentage where standards remained basically unchanged slipped to 75.9% versus 76.4% in the January survey. The percentage that eased slightly rose to 24.1% from 23.6%. Banks that eased lending standards cited increased competition from other business credit sources along with a more favorable economic outlook.
For C&I loans to large and middle-market firms, there was some deterioration in the moderately to substantially stronger categories. In April, the percentage was 46.3% versus 47.3% in January. Banks reporting demand similar to the last quarter fell to 44% from 51%, and those reporting moderately weaker demand increased to 9% from about 2% previously. Reasons for the reduction were that customer internally generated funds had increased, and plant or equipment investment decreased.