5/2/2012 Fed Survey: Business Loan Demand Continues to Increase

Demand for business loans continues to increase, according to the Federal Reserve’s April survey of senior loan officers released yesterday.

“For the second straight survey, reports from domestic banks of stronger demand for [commercial and industrial loans] outnumbered reports of weaker demand,” the Fed said. “Domestic banks also reported that the number of inquiries from potential business borrowers regarding new or increased credit lines increased ... .”

Banks reporting stronger demand said the factors included “increases in customers’ funding needs related to inventories, investment in plant or equipment, accounts receivable, and mergers and acquisitions … .”

The survey also reported that while standards on C&I loans remained unchanged at most banks, a number of domestic institutions have eased them for firms of all sizes. Most indicated “that they had done so in response to more aggressive competition from other banks or nonbank lenders,” the report said.