Though many of the country’s banks are reporting tightened standards for certain business loans, local bankers said Chattanooga’s market for such lending has remained unchanged.

One-third of senior loan officials at U.S. banks and two-thirds of those at foreign banks said they have seen more stringent terms for commercial and industrial loans in the past three months, according to a January survey conducted by the Federal Reserve.

The economic slowdown and fallout from subprime loans on the mortgage lending side has created a credit crunch for consumers that has trickled down to some business loans, said Bruce Hutchinson, an economics professor at the University of Tennessee at Chattanooga.

But, from larger regional banks such as First Tennessee to smaller locally-based banks like Cornerstone, officials across Chattanooga reported no change in their lending standards for commercial and industrial loans, which go to businesses of all sizes, from joint ventures to corporations and other commercial enterprises.

Also, the demand for those loans has remained steady, said Michael Mathis, Chattanooga city president for Regions Bank.

“Chattanooga has not seen much of a slowdown from the commercial and industrial side, from what we’ve seen,” Mr. Mathis said.

Chattanooga’s economy is more stable than other markets, he said.

“We don’t necessarily have the big booms that other markets do; we are generally more stable,” Mr. Mathis said.

At First Tennessee, things have not changed for borrowers looking for commercial and industrial loans, said Bruce Adams, executive vice president of commercial and business lending. He also did not see much of a shift regarding those loans in the future.

“I don’t see a lot of things changing,” he said. “Would we want to do another condo project in North Florida? Probably not, but that is as much a function of the supply side, in terms of credit, because nobody wants to do another condo project in North Florida.”

While the survey said that banks elsewhere reported more stringent lending guidelines and even a drop in demand for those loans, officials at several local banks said the Chattanooga market has largely withstood problems in the national economy so far.

When the economy slows down and economists begin to talk about a recession, some banks become much more careful in agreeing to lend money, Dr. Hutchinson said.

Because of the problems stemming from subprime loans, and people and businesses around the world taking excessive risks, banks tend to reign in their lending, he said.

“People in business, when things suddenly seem to change on them, and they (notice) risk, their first response is to become very conservative,” Dr. Hutchinson said. “In the credit area, that amounts to being much more careful in agreeing to loans and potentially charging higher interest rates for those loans.”

The tightened lending is already being seen, Dr. Hutchinson said, and any potential rise in interest rates has been offset by the Federal Reserve’s actions in recent weeks to keep rates low, he said.

Officials at several banks said strong marketing of commercial and industrial loans has kept their pipelines open, and therefore keeping the demand for loans high.

“There is still plenty of money available,” Mr. Adams said.

The economic environment of the country can mean some banks will have clients with a greater need for working capital, providing opportunities that would not otherwise have been available, he said.