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Business Loan Markets

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Credit availability for businesses continued to improve in 2005 and early 2006, according to the Federal Reserve’s Senior Loan Officer Survey. In the January 2006 survey (covering November, December, and January), respondent banks reported further easing of lending standards for commercial and industrial (C&I) loans. Respondents had narrowed their lending spreads, reduced collateral requirements, and increased the size of credit lines. This relaxation was due partly to stronger competition from other banks and other sources of business credit and partly to greater tolerance for risk and increased liquidity in the secondary market for C&I loans.

Suggested citation: “Business Loan Markets,” Federal Reserve Bank of Cleveland, Economic Trends, no. 06-05, pp. 18, 05.15.2006.

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