Nearly seven in ten bank loan officers expect an increase in commercial lending for retail small business over the next year, according to the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices.
According to the survey, 69% of banks expect a “moderate increase” in origination of small business loans (including term loans and lines-of-credit) to retail business over the next year. Less than 2% expect a “moderate decrease” in commercial loans to small business during the same period.
When it comes to underwriting policies for approving applications for new retail small business loans over the past year, nearly 14% of banks found they have tighter requirements regarding personal guarantees, while 7% said these small business loan requirements have loosened.
Minimum underwriting policies for approving loan applications for new retail small business loans saw an uptick in tighter standards related to FICO scores of business owners over the past year, with nearly 19% of bank loan officers saying of the scores were somewhat tighter for determining loan approvals, as opposed to 10 who said they were somewhat easier.