At least 17 Vermont banks have agreed to lend up to $10 million to recapitalize the state's overburdened economic development authority while state officials search for a permanent solution.

A significant rise in loan demand during the past two years has overwhelmed the 21-year-old agency, which hasn't had a consistent source of funding from the state despite its status as a full government organization. The agency provides below-market-rate loans to small businesses and local development corporations around the state.

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