Domestic businesses found it easier to raise capital from banks and commercial lenders in the first quarter of 2018, as increased comeptition to book loans led to an easing of lending standards to U.S. borrowers. That's according to new survey data out from the Federal Reserve.

Respondents to the Fed's April Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that, on balance, banks eased their standards and terms on commercial and industrial (C&I) loans to large and middle-market firms and left their standards unchanged for small firms. Meanwhile, banks eased standards on nonfarm nonresidential loans and tightened standards on multifamily loans, whereas standards on construction and land development loans were little changed. Demand for C&I and for commercial real estate (CRE) loans reportedly weakened.

Notably, all domestic banks that reportedly eased standards or terms on C&I loans over the past three months cited increased competition from other lenders as a reason for easing. In addition, significant fractions of banks mentioned a more favorable or less uncertain economic outlook; improvements of industry-specific problems; increased tolerance for risk; and reduced concerns about the effects of legislative changes, supervisory actions, or changes in accounting standards as important reasons for easing.

Banks also responded to a set of special questions inquiring about changes in lending policies and demand for CRE loans over the past year. Banks reportedly eased important lending terms, including maximum loan size and the spread of loan rates over their cost of funds, across all three major CRE loan categories—that is, construction and land development loans, nonfarm nonresidential loans, and multifamily loans. Almost all banks that reportedly eased CRE credit policies cited more aggressive competition from other banks or nonbank lenders as an important reason for easing.