Too bad small and medium businesses aren't CCC-rated, 6x levered, recent LBOs: they would have no problem obtaining 7% financing.
From the Loan Survey Report:
In the July survey, domestic banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households, although the net percentages of banks that tightened declined compared with the April survey. Demand for loans continued to weaken across all major categories except for prime residential mortgages. The fractions of domestic banks reporting additional weakening in demand in this survey were slightly lower than those in the April survey for C&I loans and home equity lines of credit, approximately the same for commercial real estate (CRE) and nontraditional residential mortgages, and slightly higher for consumer loans.
Basically credit terms in July tightened across the board for both small and medium businesses, and while demand decreased a smidge, qualification of borrowers were seen as declining, making the downturn even more complex for small/medium businesses needing credit (and unwilling to borrow from club CIT).