The Wall Street Journal:

Small businesses finally are getting their own little piece of the federal government’s ballooning bailout package.

U.S. officials announced the federal government as part of a broader package will lend up to $200 billion to institutions that originate consumer loans and business loans backed by the Small Business Administration.

The rationale, Secretary Paulson said in a news conference, is it will create liquidity, spurring banks to lend again to consumers and businesses. Some hope it could especially help banks that specialize in offering SBA-backed loans, since such lending has dried up in recent weeks.

Nobody, of course, really knows at this point whether such a cash infusion into the lending system will actually save many struggling small businesses. But some are optimistic it will help — and feel it at least shows policy makers recognize the dire situation on Main Street and want a more direct solution.

Photo by dlnny.

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