The Federal Reserve released the October 2025 Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices, which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households in the third quarter. 

Over the third quarter of 2025, banks reported on balance tighter lending standards for commercial and industrial (C&I) loans to firms of all sizes. At the same time, demand from large and middle-market firms increased, while small-firm demand remained basically flat. For commercial real-estate (CRE) loans, most categories saw basically unchanged standards, except construction and land-development loans where a modest tightening was reported.

Key details for C&I lending

• Among banks, a modest share of banks tightened terms for C&I loans to smaller firms: restrictions like lower maximum credit-line size, tighter collateralization and increased use of interest-rate floors. 

• For large and middle-market firms, banks reported some easing of certain terms: for example, credit-line maximum size and loan-rate spreads were eased by moderate net shares of banks. 

• Reasons cited for tighter standards included: a more uncertain economic outlook, regulatory/supervisory/ accounting changes, industry-specific issues and reduced risk tolerance. 

• Reasons for easing among some banks included more aggressive competition (from banks and nonbanks), improved capital positions, and increased liquidity in the secondary market for these loans. 

• On demand: moderate net shares of banks reported stronger demand from large and middle-market firms (for new lines or increased existing lines). For small firms, demand was basically unchanged. 

• Leading motivations for increased demand: firms’ greater financing needs for inventory, accounts receivable, mergers/acquisitions, and increased investment in plant or equipment. 

• Special questions: Since the beginning of the year, banks were more likely to approve C&I loans from large and small firms with low trade-exposure, and less likely to approve from firms of any size but high trade-exposure.

Key details for CRE lending

• For loans secured by construction and land development: a modest net share of banks reported tighter standards. 

• For loans secured by multifamily properties and nonfarm, nonresidential properties: standards were basically unchanged on net. 

• On demand: a modest net share of banks reported stronger demand for non-farm nonresidential property loans; demand remained basically unchanged for multifamily property loans and construction/land-development loans. 

• Notably: foreign-bank branches/agencies reported stronger demand for both C&I and CRE loans.

The full survey and report can be found here.