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Borrowing conditions continue to improve

The senior loan officer survey for the 4th quarter of 2010 was published Monday.  Focusing on on changes to business-lending practices in the fourth quarter of 2010.  The survey results point to an overall easing in business lending conditions, both in terms of pricing and non-price aspects of business lending eased.


Moreover, the improvement is spread across all borrower categories:
  • Corporate borrowers eased for the sixth consecutive quarter.
  • Commercial borrowers, the survey points to a material net easing in both price and non-price conditions for the second consecutive quarter.
  • Small businesses, overall lending conditions eased during the fourth quarter, after remaining unchanged during the third quarter.
In all cases increased competition among lenders appears to be the primary reason for better pricing and conditions. Finally, demand has also been increasing, largely driven by corporate borrowers (M&A activity).  Bottom line Canadian firms are borrowing to fuel expectation of growth in 2011/2012. 

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