In the past couple of years, the level of bank lending has been down substantially. Did bankers tighten their lending standards? Did regulators spook the bankers? Or was there simply a lack of demand for loans? Last spring the accounting firm Grant Thornton surveyed bankers about this subject. Below is how those who worked for banks concentrating on small-business lendings rated possible causes of the crunch.
Cause of decline in lending
Lack of borrowerdemand
Shortage of lendingfunds
Lack of qualified borrowers
Uncertainty about economy
More stringent regulatory exams
Source: MCS Associates/Grant Thornton, Irvine, Calif., April 1992.