the U.S. Small Business Ad- ministration (SBA) to award loans and loan guarantees to minority businessmen may actually discriminate against the black entrepre- neurs who have the best chances of success, argue Bates, an economist at the University of Vermont, and Osborne, professor of management at UCLA.
To promote inner-city business development, the SBA is willing to assume a greater risk on loans to blacks than to whites; i.e., a black firm with small net worth is eligible for a larger SBA loan...