Last year, LXD Inc. was in big trouble. General Electric Co. was divesting the company, and rumors abounded that it would shut down the maker of liquid-crystal displays if it couldn't find a buyer. So Hugh Mailer, LXD's president, turned to drink.

Mailer didn't head for the local pub, though. He and a group of investors quaffed a low-interest state loan -- dubbed a whiskey bond by some -- which enabled them to buy the company. LXD is 1 of 54 companies that have turned to the state's liquor-loan program for last-resort funding since July 1983. Money for these cash cocktails comes from profits made on the sale of liquor, which the state controls.

The program is open to both local and out-of-state businesses. To be eligible, a company must prove that it can bring or keep jobs in Ohio and that it has exhausted all other avenues of funding. The state then mixes up a fixed-interest loan package at below market rates: It can provide as much as 50% of the total financing up to $2.5 million, or guarantees on as much as 75% of all bank loans up to $5 million.Financing is limited to the purchase or improvement of such fixed assets as land, buildings, or equipment. So far, Ohio has loaned $56 million and has guaranteed another $363,000 through whiskey bonds.

Are potato R&D pools next? Or vealchop venture capital? The Ohio Department of Development laments the fact that the state controls only the sale of hard liquor. Too bad. They could have made a meal of it.