Non-Bank Lending Marketplace Survey

Non-Bank Lending Market Insights

Middle Market C&I Loans

Key findings from our quarterly survey of top non-bank lenders.

Non-Bank Lending Survey Overview

To better understand the non-bank lending market, Cerebro conducts a quarterly survey of non-bank lending activity for middle-market commercial and industrial (C&I) loans.

The survey is to get the perspectives of private credit lenders and alternative lenders.

The survey was conducted most recently November 2021 and included non-bank lending partners nationally.

Complementing the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices, Cerebro hopes to shed light on the $1 trillion non-bank lending industry.

Key Findings

Lenders continued to ease lending standards, making it easier for businesses to get loans.

18% of of commercial banks and 25% of non-banks surveyed continue to ease underwriting standards. 

Top reasons for the willingness to loosen underwriting standards:

  • Confidence in an improving economic outlook (more than 70% of both non-bank lenders and commercial banks).
  • Increased competition (more than 90% of both non-bank lenders and commercial banks).
  • Willingness to increase risk profile (more than 70% of non-banks and 35% of commercial banks).

Loan demand is up across the board.

74% of non-bank lenders surveyed saw an increase for demand, compared to 25% of commercial banks.

Key drivers for increased demand for both non-bank lenders and commercial banks cited by over two-thirds of lenders surveyed:

  • Increased accounts receivable financing 
  • Increased equipment financing
  • Plant expansion
Commercial banks and non-bank loan demand differed for borrowers seeking capital to supplement decreases in internally generated funds. More than 50% of non-bank lenders cited this as a key reason for demand, compared to less than 6% of commercial banks. This is likely due to the higher risk profile that non-bank lenders can underwrite.

Loan terms have continued to improve for borrowers.

One third of both non-bank lenders and commercial banks indicated that they have made it easier for borrowers to get larger loans.

    Trend of easing lending standards unlikely to continue.

    The trend of easing lending standards will be unlikely to continue. The first sign of a pullback was made evident with 11% of non-banks tightening standards, almost double the prior period.

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