Monday, November 19, 2012
This chart of C&I Loans represents bank lending to small and medium-sized business. The expansion in this important source of funding for companies unable to access directly the credit market has been impressive and ongoing for the past two years. This measure of outstanding loans is up 12.5% in the past year, and is up at an annualized rate of 11.5% over the past six months. From the post-recession lows two years ago, C&I Loans are up by almost $300 billion.
The most important takeaway here is not the volume of new loans, but the fact that the ongoing increase in new lending is symptomatic of important changes on the margin: banks are more willing to lend, and businesses are more willing to borrow. This reflects improved confidence in the future, and that in turn holds out the promise of continued—albeit relatively slow—economic growth.
Posted by Scott Grannis at 10:40 AM