The protracted economic downturn and uncertainty over war in Iraq took a toll on lenders' attitudes last quarter, with most predicting the economy would perform at only a D+ level over the coming 6 months. On top of that, lenders believe lending to all business segments will remain flat, bankruptcies and loan losses will rise, and most have modest or no expectations of growth from their customers, according to the results of the latest "Lending Climate in America" survey compiled by Phoenix Management, a turnaround management firm that assists companies encountering financial, operational or management difficulties.
Most lenders said lending to corporate, middle market and small business customers would remain flat in the next six months. More than half of lenders said lending to international customers would be down.
