US businesses are borrowing less from banks. Is cheaper financing drawing them elsewhere?
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓US business demand for bank loans weakened in the third quarter for the first time in over a year.
- ✓A Federal Reserve survey showed companies turned to other lenders for cheaper financing.
- ✓While bank borrowing fell, government data showed business investment remains strong as firms explore new funding options instead.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Firstpost
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
Business demand for bank loans in the United States weakened in the third quarter for the first time in more than a year, as companies turned to more attractive financing options offered by other banks and non-bank lenders, a Federal Reserve survey showed.
The decline comes even as business investment remains strong, raising questions about whether companies are pulling back on borrowing or simply changing where they obtain credit.
The Federal Reserve's quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices, released on Monday, found that banks attributed weaker demand for commercial and industrial (C&I) loans partly to reduced customer investment in plant and equipment and partly to borrowers shifting towards more attractive funding sources.
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Firstpost
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