Funny financing

I am quite puzzled by the following situation. The US Government lent money to banks at very low interest rate, through the easy monetary policy. This funding was meant to make it easy for the banks to lend to small businesses and get the economy moving. The banks took this money but were not keen to lend to small businesses (or the small businesses were not keen to invest in a weak economy). The banks decided to use the money to buy US Treasuries, i.e. they lend the money back to the Government and pocket the margin.

The US Government is now considering to lend the money directly to small businesses. What then, is the role of the banks?