Banks continued to ease standards and terms for business loans in the first quarter, according to a Federal Reserve Board survey of senior loan officers.

About 25 percent of banks reported increased demand for commercial and industrial loans from large and middle-market firms. About 10 percent reported stronger loan demand from small businesses.

More than one-third of the banks surveyed reported increased demand for commercial real estate loans - the strongest reading since the mid-1990s.

The credit quality of potential business borrowers also improved. More than half of domestic banks said the credit quality of large and middle-market loan applicants had improved, while 35 percent said the credit quality of potential small-business borrowers had improved.

Other surveys have shown increased demand for small-business loans in recent months. Lending to small businesses increased by 12 percent in March compared with the same month a year ago, according to the Thomson Reuters/PayNet Small Business Lending Index. An April survey by Greenwich Associates found that 59 percent of small businesses had applied for a loan during the past 12 months.

Through the first seven months of its fiscal year, lending through the Small Business Administration's flagship 7(a) loan program was up 53 percent compared with the same period a year ago. That's due to a record first quarter (October through December), when borrowers and lenders rushed to take advantage of soon-to-expire higher government guarantees and reduced fees on the loans. With five months to go in the fiscal year, more than $13 billion in 7(a) loans had been approved. That means the program could hit its authorized limit of $17.5 billion before the end of the fiscal year.

Despite the big jump in the dollar volume of 7(a) lending, the number of small businesses taking these loans was about the same as last year - 33,836 so far this year versus 33,650 during the same period a year ago. Due in part to an increase in the maximum size limit for 7(a) loans, the average 7(a) loan this year is $389,027 versus $254,852 during the same period a year ago.

Meanwhile, the SBA selected the first six lenders for its new Community Advantage loan program, which will enable nonprofit organizations to make small loans to businesses in underserved communities. Lenders selected for the program include: Cen-Tex CDC, dba BCL of Texas in Austin, Texas; the Progress Fund in Greensburg, Pa.; Eastern Maine Development Corp. in Bangor, Maine; Idaho-Nevada Community Development Financial Institution in Pocatello, Idaho; Kentucky Highlands Investment Corp. in London, Ky.; and CDC Small Business Finance in San Diego.

For more information, see www.federalreserve.gov or www.sba.gov

Consumer bankruptcies fell 7 percent in April compared with the same month last year, according to the American Bankruptcy Institute.

April's 134,720 filings also represented a 7 percent drop from March, according to data from the National Bankruptcy Research Center.

ABI expects bankruptcy filings for 2011 as a whole will fall below last year's $1.5 million.

"As consumer debt levels fall and families continue to shore up their finances, bankruptcy filings will continue to drop, as well," said ABI Executive Director Samuel  Gerdano.

For more information, see www.abiworld.com