US lenders turn upbeat but 28% plan tighter terms

US commercial lenders have become more optimistic about the economy, but more than a quarter still expect to tighten credit structures as businesses approach 2027, according to new research from financial advisory firm J.S. Held.

The firm’s fourth-quarter Lending Climate in America survey found that 28 per cent of respondents expect tighter lending requirements, compared with 15 per cent anticipating relaxation. A further 57 per cent expect to maintain existing structures.

The results suggest that improving confidence in economic conditions has yet to translate into materially easier access to secured commercial credit.

Lenders’ weighted average assessment of near-term US economic performance increased from 2.26 in the third quarter to 2.86 in the fourth. Their longer-term assessment also improved, from 2.04 to 2.24.

Nevertheless, most respondents expect to preserve or strengthen the conditions attached to lending.

The survey covers commercial banks, private credit funds, finance companies and factoring providers, making its findings relevant to businesses dependent on asset-based lending, receivables finance and revolving working-capital facilities.

Credit structures assessed include collateral requirements, guarantees, advance rates and loan covenants.

For asset-based lenders, maintaining stricter advance rates can limit how much borrowers receive against eligible receivables, inventory or equipment, even where the underlying value of those assets increases.

For factoring providers, the relevant considerations include debtor quality, payment performance, concentration limits and the proportion of receivables considered eligible for financing.

The survey also indicates that companies are continuing to pursue expansion despite the cautious financing environment.

The proportion of lenders reporting customer plans to introduce new products or services increased from 41.5 per cent to 45.5 per cent between the third and fourth quarters. Planned capital investment rose from 40.9 per cent to 44.8 per cent.

That combination creates a potential mismatch between borrowers’ investment ambitions and lenders’ willingness to relax financing conditions.

Risk concerns remain prominent. Geopolitical conflict was the most frequently identified factor capable of affecting the near-term economy, cited by 36.8 per cent of respondents.

J.S. Held also reported increased expectations of higher interest rates over the following six months, adding another consideration for companies refinancing existing borrowings.

The results are survey-based expectations rather than evidence of actual tightening across every US lending market. The published summary does not establish that all lenders are applying the same conditions.

Nevertheless, the findings suggest that stronger economic sentiment alone may not be sufficient to expand borrowing availability.

For businesses approaching refinancing or seeking additional working capital, collateral quality, cash-flow resilience and the structure of existing debt remain central to lenders’ decisions.