August 10, 2026

Bob Coleman
Founder & Publisher

Main Street Lending: Business as Usual

Sometimes the most important number in a Federal Reserve report is the one that does not move.

That is my takeaway from the Fed’s July 2026 Senior Loan Officer Opinion Survey.

For small business lending, there was no major shift. No rush by banks to tighten credit. No big move to loosen standards.

And no sudden change in borrower demand.

Business as usual.

The Fed surveyed 56 domestic banks about lending conditions during the second quarter. For purposes of the survey, a small business is a company with less than $50 million in annual sales.

Start with credit standards.

Of the 55 banks responding to the small business C&I question, 90.9% said their credit standards remained basically unchanged. Just 5.5% tightened somewhat, while 3.6% eased somewhat. Nobody reported tightening considerably or easing considerably.

Demand looked much the same.

About 85.5% of banks said small business loan demand was about the same as 3 months earlier. Another 9.1% reported moderately stronger demand, while 5.5% said demand was moderately weaker. The Fed’s conclusion was simple. Small business C&I demand was basically unchanged.

There was a little movement on pricing.

For small business loans, 14.5% of banks reported narrowing spreads over their cost of funds. The remaining 85.5% reported no change, and no bank reported wider spreads.

The longer-term picture tells the same story. When banks compared current standards with their historical range going back to 2005, the Fed reported that standards for small firm C&I loans were easier than the midpoint of that range. Standards for very small firms were near the midpoint. The Fed also said C&I standards had eased across all loan types compared with July 2025.

Business as usual.