Black borrowers face “a perception out there that African Americans have an inferior skill set and expectations,” argues R. Donahue “Don” Peebles, chairman and CEO of Peebles Corp., an African American real estate developer. “How do you start a business if banks won’t lend?” asks the Reverend Jesse Jackson. Smaller nonprofit players such as Seedco Financial, which extends money and technical assistance to low-income entrepreneurs, may help some deal with the funding gap. As President James Bason points out: “The biggest challenge is the first 90 days, when there’s a large outflow of capital.”

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