Artificial intelligence has begun shaping how banks assess corporate borrowers, according to the Federal Reserve's January 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS). The report, which covers trends in lending standards and demand during the fourth quarter of 2025, revealed that a growing number of banks now weigh a firm's AI exposure when approving commercial and industrial loans.
A moderate net share of banks said they were more likely to approve loans to firms benefiting from AI adoption, while a majority reported they were less likely to extend credit to businesses negatively affected by automation or technological disruption. For companies with limited or no exposure to AI, lending standards remained largely unchanged. Respondents broadly viewed AI as having beneficial effects across all major economic sectors, signaling that technological adaptability is becoming a differentiating factor in credit decisions.
Beyond AI, the SLOOS indicated that overall lending conditions changed only modestly in late 2025. Most banks reported little movement in standards or terms for both C&I and commercial real estate loans, though some easing occurred in response to competitive market pressures and improved economic sentiment.
For C&I loans, a modest net share of banks continued to tighten standards for firms of all sizes, while a moderate net share reported lower costs on credit lines and narrower spreads for large- and middle-market borrowers. Small firms faced slightly tighter credit limits, but other terms were steady.
Among the factors easing conditions, the main ones were competitive dynamics, stronger liquidity in the secondary markets and an improving economic outlook. Institutions that tightened standards cited persistent uncertainty, reduced risk tolerance and expectations of shifting regulation.
Loan demand strengthened modestly, with large and middle-market companies showing higher borrowing appetite, especially for mergers and acquisitions, inventory buildup and capital investment. Foreign banks also reported significant increases in C&I loan demand.
In the commercial real estate segment, standards remained generally stable. A modest share of banks eased lending terms for multifamily properties, while large banks reported easing across more CRE categories than their smaller peers. Demand for nonfarm, nonresidential and construction loans picked up modestly, while multifamily demand remained flat. Foreign institutions also saw notable growth in CRE loan demand.
The Federal Reserve's findings underline a key shift as businesses and lenders adapt to technological transformation. With AI now influencing underwriting decisions, credit access may increasingly favor firms that leverage automation, data analytics and other digital efficiencies — positioning technology adoption as both a competitive advantage and a risk factor in 2026's lending landscape.
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