If small businesses are the "heart of the American economy," as President Barack Obama said in March, then several state and city development authorities are acting as defibrillators by giving them a jolt of much-needed working capital.

With many of the nation's banks tightening credit standards, several states - including New Jersey, Connecticut, Ohio and Illinois - and a number of cities are establishing new financing programs or improving old ones, all in an effort to keep credit flowing to small businesses. Whether the agencies are enhancing loan guarantee programs or directly participating in loan deals, the intent is the same: to encourage banks to make loans that, in the current economy, they otherwise might not consider.

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