I heard many complaints in the wake of the $840 billion federal economic-stimulus plan of 2009 that it did little to help small businesses.

Congress followed up with 2010's Small Business Jobs Act, which included a $30 billion Small Business Lending Fund (SBLF). Once again, the program underwhelmed as many banks simply exchanged the capital they'd received through the Troubled Asset Relief Program for less-expensive capital from the SBLF.

Now comes the $1.5 billion State Small Business Credit Initiative, which was also part of the jobs act.

Each state was allocated an amount based on a formula that considered the number of jobs lost during the recession. In exchange, the states are expected to leverage the federal money to generate private investment of at least 10 times that amount.

Over the next year or so, New Jersey expects to receive $33.76 million, Delaware $13.17 million, and Pennsylvania $29.24 million.

Last week, the Pennsylvania Department of Community and Economic Development detailed a refreshingly decentralized approach to how that money will turn into nearly 950 loans for small businesses.

The state agency allocated $19.51 million among 11 nonprofit or quasi-public organizations. In addition, the Pennsylvania Machinery and Equipment Loan Fund will get $9 million to make loans anywhere in the state.

The state's Ben Franklin Technology Development Partners and Life Science Greenhouses programs will receive the largest allocation of $5 million.

In effect, each of the four nonprofit Ben Franklin centers and three life-sciences funds will receive about $714,000. The Ben Franklin Technology Center of Southeastern Pennsylvania and BioAdvance are both based in the Philadelphia area.

Barbara Schilberg, chief executive officer of BioAdvance, said she expected to use the money to provide seed funding to some ventures and follow-on funding to others in its portfolio of drug and device developers.

The Philadelphia Industrial Development Corp. will get $2 million to make loans as will the Exton-based South Eastern Economic Development Corp., an SBA lender. Better known as SeedcoPA, the organization will use the money for a new revolving loan fund that will be available to small businesses throughout the Philadelphia area.

Chuck Evans, managing director of SeedcoPA, said the new fund will be more flexible than previous state loan programs because the money can be lent to a wider variety of borrowers - not just manufacturers - and for more purposes, such as working capital.

With letters of intent from 11 banks in the region, Evans expects to easily leverage the federal funding. Directed by SeedcoPA, the Pennsylvania Regional Revolving Loan Fund's goal is to create 15 jobs for each $1 million lent, he said.

John Grady, president of PIDC, credited state officials for choosing to push the money into the hands of organizations that are already engaged in small-business lending of all sorts, rather than simply creating a new state program.

"I really think it's a more efficient way to get money into the small-business pipeline," he said.

One of the smallest amounts - $262,500 - will go to the Economic Opportunities Fund, a 12-year-old microloan program run by the nonprofit Women's Opportunities Resource Center in Philadelphia.

Since 1999, the fund has made 389 loans, totaling $1.36 million. Loans include $1,000 to help women, minority, and low-income entrepreneurs to establish a credit record; $2,500 to start up a new business; and up to $20,000 for a small-business loan.

About half of its active portfolio of 109 loans is start-up loans, according to Lynn Cutler, president of WORC.

Cutler said the new funding "expands our capacity to lend." The Economic Opportunities Fund anticipates making 39 loans and hopes those businesses create 26 jobs in addition to those of their owners, she said.

Contact Mike Armstrong
at 215-854-2980, marmstrong@phillynews.com, or @PhillyInc on Twitter. Read his blog, "PhillyInc," at www.phillyinc.biz