At a glance
- Its claims about tighter collateral requirements and closer scrutiny of credit-line use draw on evidence roughly 18 months old, rather than a newly released survey.
- The author presents a five-part underwriting framework covering character, capacity, cash flow, collateral and conditions.
- One case describes a $5 million term loan to a food manufacturer after its senior lender withdrew a credit line, according to the commentary.
A lender commentary published by Middle Market Growth on October 8 cites April 2025 Federal Reserve survey data to argue that bank underwriting overlooks borrowers' strengths. Its claims about tighter collateral requirements and closer scrutiny of credit-line use draw on evidence roughly 18 months old, rather than a newly released survey.
The author presents a five-part underwriting framework covering character, capacity, cash flow, collateral and conditions. The argument is that reputation and business changes can matter alongside assets available as security and projected cash flow.
One case describes a $5 million term loan to a food manufacturer after its senior lender withdrew a credit line, according to the commentary. The author says falling inventory values had restricted borrowing even though the company's operations were unchanged; the loan provided time to arrange replacement financing.
A second case concerns a diagnostic company with $80 million in annual revenue that moved into in-home testing, according to the author. The commentary argues that its existing financing no longer reflected the improved business. These are the lender's case accounts, rather than evidence of a market-wide change in bank terms this month.
Reported by the Direct Lending desk from Middle Market Growth. Published . Updated Oct 8, 2026 · 12:00 p.m. ET. Corrections