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October 21, 2010

Phoenix Survey Indicates Lenders’ Confidence Waning

Expectations for Lending are Declining – Possible Double Dip?

PHILADELPHIA (October 21, 2010) —- Although lenders predicted encouraging signs for the economy in the previous quarter, lenders are now more hesitant on their outlook for domestic lending, according to the results of last quarter’s Phoenix Management “Lending Climate in America” Survey.

Respondents indicated that, on average for all domestic lending categories, thirty-seven percent have expectations for increased loan demand (versus 44 percent in the prior quarter). However, the percentage of those lenders who believed loan demand would decline was reduced by nearly half versus the previous quarter (7 percent in Q3 2010 versus 13 percent in Q2 2010). Both Corporate and Middle Market commercial lending experienced double digit retreats in regard to expectations for increased loan demand (10 percent and 13 percent declines, respectively).

“The fact that lender’s expectations are declining ” after 7 quarters of increasing ” is pretty significant,” said Phoenix Senior Managing Director and Shareholder Michael Jacoby. “The results suggest a possible double dip in the economy.”

Also, when asked about ways to improve the unemployment rate, nearly half (45%) of the participants believe that regardless of what initiatives are implemented in the short term, it will take several years from now to restore confidence in the U.S. economy and yield significant improvements in the labor markets.

To see the full results of Phoenix’s Lending Climate in America Survey, please visit

About Phoenix

Celebrating its 25th Anniversary, Phoenix is an operationally-focused advisory firm, providing turnaround, crisis and interim management and capital advisory services to middle market companies in transition. Since 1985, we have aggressively advocated on behalf of our clients in more than 950 assignments nationwide across a variety of situations and industries. Visit &

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