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August 24th, 2010

Via: CNN:

Many state programs that help small businesses get loans they need to survive or expand are in jeopardy, victims of the economic downturn and state budget gaps.

The programs — in dozens of states from Vermont to California — cost relatively little to run, are remarkably successful and create jobs.

Massachusetts’ program has been running for 17 years and has made almost 4,300 loans. Indiana kicks in more for loans that will lead to high-paying jobs.

The loans are a lifeline at a time when small businesses are still struggling to get credit from banks. In the last two years, $40 billion worth of bank loans has evaporated, according to bank reports submitted to the government.

But many of the programs, which marry private lending with state dollars, are running out of cash, and states can’t afford to shoulder the burden on their own.

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