Do you feel the credit crunch yet?

How badly has the credit crunch hit small companies? The Times leads today with a story about banks clamping down on business loans. Peter S. Goodman writes:

But recent signs suggest that tight lending is spilling from housing into other areas of the business world. Companies with solid credit and profitable businesses can generally still get loans, but rates are higher and wait times are longer.

The paper also had a brief item Sunday about how fewer laid off managers are starting their own businesses than during previous downturns, possibly because of tight credit.

But not everyone agrees that small companies are having a harder time getting credit. The National Federation of Independent Business, in its monthly survey of members, reports that “For the 10th straight month since the Fed declared the existence of a credit crunch, there has been no evidence of credit problems on Main Street. ‘It is a Wall Street issue,’ [NFIB economist William] Dunkelberg said.”

The NFIB points to inflation as the top concern. That makes sense, because the rising cost of gas and other commodities affects every company, while not every firm is looking for credit. But is it really fair to say there’s "no evidence" that small companies face more difficulty getting loans and lines of credit?

The Fed’s April survey of senior loan officers (PDF) reports that banks have tightened the standards and terms for commercial and industrial loans to companies of all sizes. The quarterly Fed query of 56 US banks started to show tighter standards for C&I loans beginning last July, around when it became clear problems in the mortgage market were spreading to the broader economy. Banks have lost more than $400 billion in the crisis so far.

A new Fed survey should be released in August. In the meantime, tell us what you're seeing. Has your company been turned down for a bank loan? Offered less favorable terms? Or is lending to small firms, as the NFIB suggests, business as usual?

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