US Lenders Tighten Grip as Economic and Geopolitical Risks Mount

Lender sentiment has soured significantly since the second quarter. The weighted average score for near-term US economic performance dropped to 1.96 from 2.26, while long-term expectations fell to 2.04 from 2.33. According to the survey, geopolitical conflict remains the primary economic threat for 39.9% of respondents, followed closely by domestic recession concerns at 30.4%.

Despite this guarded outlook, the data highlights a persistent gap in corporate strategy. While lenders prioritize liquidity and disciplined underwriting—particularly for loans exceeding $25 million—borrowers continue to push capital into new products, market expansion, and hiring. Michael Jacoby, Senior Managing Director at J.S. Held, noted that risk management has gained parity with growth in current lending decisions, forcing companies to demonstrate higher levels of operational stability to secure capital.

Financial Services remains the sector most vulnerable to volatility, followed by Energy, Consumer Products, and Real Estate. While 56% of lenders plan to maintain existing loan structures, the appetite for risk is shrinking. Livia Paggi, an expert in political risk at the firm, emphasized that these challenges are increasingly interconnected, with trade dynamics and supply chain disruptions forcing lenders to look far beyond traditional credit fundamentals when evaluating long-term viability.