C&I lending has started climbing again despite tariffs and geopolitical volatility.

As of April, loan totals are nearing $2.9 trillion—the highest level outside the pandemic spike.

And unlike 2020, this isn’t emergency borrowing. It’s borrowing to expand.

Prior to this, C&I lending didn’t show much momentum. But with lending picking up again, it means businesses are borrowing for growth, signaling that the economy is a lot more resilient than the headlines suggest. 

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For the past few years, a missing puzzle piece has kept our market outlook mixed. We were cautious as banks tightened lending standards back in 2023. At the same time, the market kept climbing, raising valuations and sentiment.

Those headwinds have eased in recent months and valuations and sentiment have cooled. That change can be partly attributed to earnings growth and partly because of volatility from America’s war with Iran.

However, even though banks were willing to lend, companies weren’t borrowing.

Commercial and industrial (“C&I”) lending wasn’t showing much momentum.

That’s important because C&I loans fuel corporate growth. They finance day-to-day operations and expansion projects, like today’s manufacturing plants and data centers.

C&I loans are also known as a “leading indicator.” When they rise, banks are willing to lend and businesses are eager to borrow. That combination means credit is flowing into the economy.

In other words, today’s higher borrowing leads to tomorrow’s higher earnings.

When C&I lending stalls, it sends the opposite message. Companies may still be profitable, but they’re saving cash rather than investing in growth.

That lag was one of the biggest reasons we were cautious earlier in this cycle. Before the pandemic, C&I loans peaked at roughly $2.4 trillion. Lending briefly spiked above $3 trillion in 2020. But totals quickly pulled back to roughly $2.8 trillion for much of 2023 and 2024.

Then, after the 2024 presidential election, loan totals dipped. While it wasn’t a disaster, it showed corporate America was still hesitant.

Fast forward to today, C&I lending has started climbing again despite tariffs and geopolitical volatility. As of April, loan totals are nearing $2.9 trillion—the highest level outside the pandemic spike.

And unlike 2020, this isn’t emergency borrowing. It’s borrowing to expand. And it’s sustainable.

Businesses are investing in projects again.