Matthew Bjonerud
With many parts of the economy still struggling amid the COVID-19 pandemic and an uneven recovery expected, it’s worth paying attention to the signs that point to activity picking back up.
Baltimore-based fintech company Cerebro Capital spotted one such indicator in a review of lending data for the fourth quarter of 2020: Rising numbers of banks and non-bank lenders saw an easing of credit standards for loans or credit provided for other businesses. These standards are the set of criteria a lender uses to determine whether an applicant should receive the funding they request.
Cerebro, which offers a platform for corporate lending in the middle market that has data from more than 800 lenders, surveyed non-bank lenders in its network, which include venture debt lenders and business development companies. It also analyzed the Federal Reserve’s quarterly survey of commercial banks. It found that 20% of responding non-bank lenders said that terms for a loan from their firm were better in Q4, as compared to 6% the prior quarter. Of commercial banks that responded to the Federal Reserve’s quarterly survey, 12% saw better terms, as opposed to 3% in Q3.
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