There is encouraging news in the Federal Reserve’s most recent Senior Loan Officers Opinion Survey: a net 10.5 percent of respondents reported relaxing their standards for commercial and industrial loans to large borrowers while holding standards constant for small borrowers. Banks also reported narrowing their spreads.

While demand for commercial real estate financing was reported as having increased during the period (4th quarter 2010) to its highest level in five years, lending standards for real estate loans remained unchanged.

Take-a-way: We seem to be nearing an inflection pointhow long it will take to get to the next plateau where lending standards for commercial real estate loans will become less stringent is hard to predict. Our guess: think Fall, 2011 as by then the improvement in real estate fundamentals, combined with the strengthening of financial institutions’ balance sheets, will allow lenders to become more “aggressive.” If not aggressive, at least more receptive to discussing the subject.