$1.5 billion headed to states to help small businesses

Missed this late last week, but the Treasury Department on Friday announced a $1.5 billion lending initiative meant to help spur small businesses at the state level.

To receive funding, states have to demonstrate that for every dollar the federal government provides, they will generate $10 in new private lending, which will create an impact of $15 billion on the economy, the Treasury said.

Among the six states receiving the biggest allocations, California has the largest at $168.62 million, followed by Florida at $97.66 million. Michigan can receive up to $79.16 million and Illinois up to $78.37 million. Both New York and Ohio will each receive slightly more than $55 million.

This is of course in addition to the Small Business Jobs Act which went into law recently, creating a $30 billion small business lending fund for community banks and offering tax cuts for small businesses.

So is throwing more money at the problem a good idea? Let’s certainly hope so. As the old saying goes, you’ve got to spend money to make money.