From today’s Houston Business Journal in a non-bylined item:
Encore Bancshares Inc. on Wednesday said it received $32.9 million from the federal government’s Small Business Lending Fund and promptly redeemed its Troubled Asset Relief Program funds.
The HBJ’s Christine Hall reported back in May that two Houston banks, (the other was MetroCorp), would likely do exactly that. She based her reporting on an analysis by SNL Financial. (Note: SNL does NOT stand for Saturday Night Live.)
The Small Business Lending Fund is a $30 billion Treasury Department fund that is part of the Small Business Jobs Act of 2010 (the Jobs Act) that “encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion.”
American City Business Journals throughout the U.S. have been all over this story, affecting as it does many of their core readership. MoneyCNN, too, covered it, and in a July 2011 story described some problems – not enough demand.
There are 7,000 community banks across the nation, according to the Independent Community Bankers of America (ICBA). But only 926 — slightly more than 13% — of those banks even applied to participate in the program.
“As part of the application, you had to have a small business lending plan to demonstrate that you could deploy this lending,” said Paul Merski, executive vice president and chief economist of the ICBA. “You have to have small business loan demand.”
The federal money was supposed to leave the recipient banks in the form of loans, not to pay off TARP funds. The deadline to the U.S. Treasury to get the money out the door was yesterday. It won’t all be delivered.
“…the rest of the money — the $18.2 billion — will go back to Congress.”
So, while everybody is tracking TARP funds (“The goverment made money on this program!”), we have to ask, is anyone paying that close attention to the SBLF? When will these “loans” to banks be paid off?