Fed Survey Finds Business Loan Demand Falls for First Time Since 2025

The Federal Reserve’s October loan survey found business demand for bank loans fell in the third quarter for the first time since the second quarter of 2025, even as equipment investment surged. Banks said borrowers were seeking more attractive financing, while standards for large and midsize companies were largely unchanged and lending to small businesses tightened modestly. Commercial real estate standards tightened across construction, nonresidential and multifamily loans, with demand weakening in each category. Household borrowing was mixed: demand for mortgages and auto loans declined, while credit card demand rose to its strongest level in four years, which banks linked in part to consumers responding to higher prices. Analysts said steady lending standards for larger businesses may support investment broadening beyond AI.