Credit & loans: few smaller companies seizing loan opportunities.

• Position: NEWS&REVIEWS

The share of small businesses and mid-sized companies that report borrowing from banks has declined from recent highs reached in the summer of 2011--despite the fact that these firms say improving credit conditions are actually making it easier to obtain loans.

According to the results of a Greenwich Market Pulse, by Greenwich Associates, the percent of small businesses that said they had negotiated a new bank loan or refinanced in the prior three months declined to 32 percent in May 2012 from 34 percent in July 2011. However, the drop among mid-sized companies was more pronounced: 30 percent of mid-sized companies participating in the survey said they had taken out a new loan or refinanced an existing loan in the prior three months--down from the 43 percent that had reported loan activity in July 2011.

What makes these findings particularly striking is the fact that both small and mid-sized companies report improvements in credit conditions that make it easier for firms to secure bank credit, albeit with a more robust shift among mid-sized companies.

For mid-sized companies, credit conditions improved much faster in the wake of the economic crisis, and the Credit Availability Index, also conducted by Greenwich for these companies, climbed into positive territory in July 2011. After a...