Credit remains hard to come by, according to GreenwichAssociates' latest survey of small to midsize U.S. companies. Infact, 86% of the smallest companies–those with annual revenue of$10 million or less–told Greenwich in September that it wasbecoming harder to secure credit in the third quarter, up from the68% that expressed that view in July.

Among midsize companies, those with annual revenue of $10million to $100 million, 65% said it was becoming harder to securecredit in the third quarter, unchanged from the view in the secondquarter.

The bleaker assessment by smaller companies reflects the factthat banks regard them as riskier, says Chris McDonnell, aconsultant at Greenwich Associates. “In large terms, everyone isfinding it more difficult to borrow, it's just accentuated for thesmaller companies that represent a greater risk for the banks,”McDonnell says. “Overall, the financial health of companies isdeclining, which is raising their risk profile in the eyes of thebanks, who are far more conservative or risk-adverse today than ayear ago.”