B2B Payments

Fed Highlights Seesaw Of Corporate Lending

The latest figures from the Federal Reserve paint an unclear picture about corporate borrowing in the U.S. According to Wall Street Journal reports on Monday (Nov. 2), the Fed’s most recent survey found mixed results among banks for the third quarter of 2015 when it comes to business borrowing.

According to analysts, commercial and industrial loan demand was “about unchanged” compared to other periods of time.

“Overall, banks reported little change in their lending standards and terms for commercial and industrial loans,” said reports summarizing the Fed’s findings, “and the ones that did change were more likely to have tightened, especially for large and middle-market borrowers.”

[bctt tweet=”Banks reported little change in their lending standards and terms.”]

The Federal Reserve reportedly pointed to greater uncertainty among borrowers regarding the future economy. Certain industries that have been challenged in recent months have also led to less-than-stellar loan demand.

The report also highlighted a trend among some banks that saw a bit of easing on the terms of corporate loans, including credit lines. But riskier loans for large and mid-market borrowers led to higher fees, according to reports.

The Fed surveyed data from 69 domestic banks, as well as 23 U.S. branches of non-U.S. banks between Sept. 29 and Oct. 13, the publication said.

Analysts also looked at consumer borrowing and found a weakened demand for consumer credit cards and reduced demand for loans of an array of categories.

The Federal Reserve’s latest research may not come as a surprise considering the release of findings from an earlier survey, published in August. At the time, the Fed found that banks overall made few changes to their loan application approval standards, largely thanks to “more aggressive competition,” but that there was evidence that corporate loan demand was on the rise. Therefore, banks would soon be easing these approval standards, especially for large corporations.

To check out what else is HOT in B2B, click here.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.