Global consulting firm J.S. Held, reveals the “Lending Climate in America” survey results from Phoenix Management, a part of J.S. Held.  The first quarter survey results highlight lender views on policy decisions and their national/global impacts.

Phoenix’s Q1 2025 “Lending Climate in America” survey asked lenders which factors could have the strongest potential to impact the economy in the upcoming six months. Sixty-seven percent of lenders are paying the most attention to policy changes following the 2024 election, while 33% believe the interest rate risk and stock market stability have the strongest potential to impact the economy. Lenders also expressed light concern regarding the possibility of a U.S. recession.  To see the full results of Phoenix’s “Lending Climate in America” Survey, please visit https://www.phoenixmanagement.com/lending-survey/.

Lenders revealed what actions their customers were planning to take in the next six months. Almost two-thirds of the lenders surveyed believe their customers will make capital improvements while hiring new employees, followed closely by a little over half of the lenders surveyed expressing those plans for their customers.  Both bode well for an expanding economy.

41.5% of respondents identified the real estate industry as the most likely to experience volatility in the next six months, followed by the retail trade, healthcare, and cannabis industries, all at 31% of respondents.

Additionally, Phoenix’s “Lending Climate in America” survey asked lenders if their respective institutions plan to tighten, maintain, or relax their loan structures for various-sized loans. For larger loan structures (greater than $25M), the plan to maintain loan structures remained relatively constant from Q3 to Q4.  At smaller loan sizes, lenders indicated a shift towards tightening loan structures.

Lender optimism in the U.S. economy remained steady for the near term, moving from 2.40 in Q4 2024 to 2.33, although the variability in responses was much greater. In this current quarter, there is equal expectation of C and D-level performances (22%), with the remainder skewed toward greater performance at a B-level. More telling, lender expectations for the U.S. economy’s performance in the longer term decreased sharply from 2.93 to 2.11. Of the lenders surveyed, 66% believe the U.S. economy will perform at a split between a C and D level during the next twelve months, both increases from the prior quarter. In this quarter, there was a substantial decrease in a prediction of a “B” level performance.

“Lenders remain very concerned about the economic impact from policy changes with the new administration,” says Michael Jacoby, Senior Managing Director of Phoenix Management, a part of J.S. Held and Practice Lead of J.S. Held’s Strategic Advisory Group.  This concern was evident in the dramatic reduction in the long-term GPA of economic performance from 2.93 in Q4 2024 to 2.11 in Q1 2025.  The variability of responses to both the short-term and long-term GPAs indicate a lack of consensus on the part of lenders.

Despite this concern, lenders reported that the majority of their customers expect to increase spending on capital expenditures and expand hiring, both of which should bode well for continued economic expansion.  Jacoby adds, “Everyone is waiting with bated breath to see how the various policy changes shake out.  Stay tuned!”