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Treasury Gives Bank $23.9M to Create Jobs

On Wednesday the ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx released a statement announcing that the ""Small Business Lending Fund"":http://www.treasury.gov/resource-center/sb-programs/Pages/Small-Business-Lending-Fund.aspx (SBLF) had provided ""Bank of Houston Holdings, Inc."":http://www.bankhouston.com/aboutus_mission.cfm with a $23.9 million capital infusion, with the hope that it will signal a boost in lending to small businesses.

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""This funding will help break down barriers to credit for small businesses so they can invest, expand, and create new jobs,"" Rosie Rios, Treasurer of the United States, said in the statement. ""Continuing to unlock access to capital for Main Street entrepreneurs is vital to strengthening economic growth and job creation in local communities across our country.""

According to the statement, the SBLF tries to help small businesses, still encumbered by weak economic conditions, by supplying capital to banks with less than $10 billion in assets. As the bank ups its lending volume for small businesses, it pays less on SBLF dividend rates, something the SBLF hopes will turn banks into bellwethers in a gloomy job and lending environment.

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The SBLF is an Obama administration initiative that aims to front $1.5 billion in capital to new and older state programs in order to accelerate $15 billion in new lending volume, the statement said.

""It's a source of growth funding for smaller ventures that need capital,"" Jim Stein, president and CEO of the Bank of Houston, told ""_The Houston Chronicle_"":http://blog.chron.com/txpotomac/2011/07/bank-of-houston-receives-23-9-million-from-treasury-department-for-small-business-lending/.

The news publication reported Stein as saying that his bank finished the 12-month application process after meeting prerequisite qualifications and getting the green-light from Congress.

Analysts and economists across the spectrum find consensus in believing that job growth, in turn, jumpstarts conditions fundamental to housing growth and recovery.

In a past interview with _MReport_, Vincent Valvo, group publisher at ""The Warren Group"":http://www.thewarrengroup.com/portal/, described the links tying together job growth, household formations, and home construction as a closely knitted ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô and sometimes vicious ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô circle: ""People don't have jobs, so they're not buying houses; not buying houses, not buying things; so manufacturers can't employ people; people don't have jobs, people can't buy houses.""

""When you have weak job growth, that keeps a limit on housing activity,"" says Jonathan Smoke, executive research director at ""Hanley Wood Market Intelligence"":http://www.hwmarketintelligence.com/v4/default.asp.

According to the _Chronicle_, Stein added that the Bank of Houston is ""excited to have this source of growth capital. It will hopefully create new jobs.""

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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