With the March 31, 2011, application deadline looming, many of
our clients are asking whether or not to participate in the Small
Business Lending Fund ("SBLF") program. The SBLF promises
to provide community banks with access to Tier 1 capital at rates
between 1% and 5%, depending on the increased level of small
business lending the bank enjoys. Much like TARP, the bank receives
the funding by selling preferred stock to the US Treasury. But what
exactly does it do and what does it mean for your bank? I think we
would all agree that, in order to right our fragile economy, we
need to promote job growth and stabilize real estate valuations.
Without those foundations, our economy, and therefore our banking
industry, remain susceptible to a more severe depression. Community
banks also need to replace what for many institutions has been
their primary revenue source, real estate development loan revenue.
Most community banks have been searching for replacement revenue
sources,
