Small commercial lenders - wary of loan losses and bankruptcies - expect to become increasingly tightfisted with credit in coming months, according to a survey taken in the third quarter.

Of the 73 banks and other lenders surveyed by Phoenix Management Services Inc., 49% predicted that loans to small companies - those with up to $50 million of revenue - would drop in the next six months, compared with 39% that gave the same answer in the second-quarter survey. Fifty-one percent expected lending to middle-market companies ($50 million to $250 million of revenue) to drop, up from 40% in the second quarter. For companies with more than $250 million of revenue, 43% of respondents predicted a decline in lending, compared with 32% the previous quarter.

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