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The mortgage credit crunch has spilled over into business lending as local banks are less risk-inclined than they used to be and credit is harder to come by for businesses, U.S. Small Business Administration officials said. The number of SBA-backed loans from banks has trended down as banks toughen their standards and small businesses are more cautious about expansion.

A January survey of senior loan officers by the Federal Reserve found that one-third of U.S. banks had tightened their lending standards for commercial and industrial loans during the fourth quarter. This means higher costs of credit lines and premiums charged on risky loans.