Lenders anticipate borrowers will make new capital investments, acquisitions and hires, while expectations for loan losses, bankruptcies, unemployment and bank failures are at near all-time lows, according to the Q4 Phoenix Management “Lending Climate in America” Survey.

This quarter’s diffusion index, which measures lenders sentiment towards loan losses, bankruptcies, unemployment and bank failures, showed that all four categories have negative diffusion indexes of 23, 15, 17 and 17 percentage points, respectively. The negative diffusion indexes in all these categories indicate lenders continue to be optimistic in their outlook for the U.S. economy as it enters 2014.

In addition, making new capital investments ranked highest amongst responses, at 43% of the lenders surveyed. Thirty-nine percent (up three percentage points from last quarter) of respondents expect borrowers to start making acquisitions. Additionally, 27% of lenders believe their borrowers will begin to hire new employees as well as start raising additional capital, a nine and two percentage point increase over the prior quarter, respectively.

“We did see a negative signal from lenders regarding leverage multiples decreasing,” says Michael Jacoby, Phoenix managing director and shareholder. “In the survey, an overwhelming number of lenders have indicated the highest ratio they would consider is 2.5x to 3x, however, we are still seeing in excess of 3.5x quite frequently in the marketplace.”

To see the full survey go to, click here.