From the Editor's Desk

More Banks Tightened Lending Terms in the First Quarter of This Year. Some Are Charging More, Too

Getting a bank to approve your loan application is a tough proposition in this still chilly credit environment--and it's getting even more difficult. Over the first three months of this year, 21 percent of banks tightened lending standards for small businesses with less than $50 million in annual sales, according to the Federal Reserve's most recent Senior Loan Officer Opinion Survey released on Monday. That marked an increase from the fourth quarter of last year when 19 percent of banks tightened loan standards. Only two percent of banks eased lending standards for small businesses during the first three months of this year.

What may be most troubling to entrepreneurs is the type of banks that are stiffening their criteria for small business lending. The credit pullback was most pronounced in small and medium banks, which tend to be the go-to lenders for small businesses, with 30 percent of non-large banks tightening their loan standards for small businesses.


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