This contrasts sharply with survey responses last September which indicated that the NFIB's index of small business optimism and the fraction of firms that considered the next three months "a good time to expand" had remained at levels similar to those seen in the first half of 2007.
If demand conditions continue to deteriorate, reduced demand for loans could lead to future declines in small business loans even if credit supply conditions remain about the same. A less comforting picture of small business credit supply conditions is provided by the Duke University/CFO Magazine Global Business Outlook survey, conducted most recently in March.