WASHINGTON, D.C. — The Federal Reserve says banks loosened lending standards for small businesses over the past three months but that demand for loans remains weak.
It marks the second time in nearly four years that banks have made loans easier for small businesses to obtain, according to the Fed’s new quarterly survey released Monday. The first breakthrough came in August, when the previous survey was issued. The Fed defines small businesses as those with annual sales of less than $50 million.
Banks pointed to a more “favorable or less uncertain economic outlook” and increased competition as reasons for loosening lending standards.
Even so, demand for commercial and industrial loans declined over the last three months, especially for small firms, the Fed says.