Net Percentage of Banks Tightening Standards for C&I Loans to Small Firms

## What this measures

Net share of domestic banks tightening standards on commercial and industrial loans to small firms.

## Why it matters

Banks tighten before borrowers default. The SLOOS is the Fed asking lenders, every quarter, whether they are pulling credit in — and it has led every post-1990 downturn in business investment. Standards tightening while demand weakens is the credit floor cracking from both sides.

## How to read it

A net percentage: above zero means more banks tightened (or saw stronger demand) than loosened. Readings above +30 on standards have coincided with recession; sustained readings below zero are expansion conditions.

## What it does not say

It is a diffusion index of opinions, not a volume of loans. It says direction, not magnitude.

## Source

Federal Reserve Board via FRED (`DRTSCIS`). Quarterly, public.