Nine of 10 minority-owned firms surveyed by a Boston nonprofit group said they had applied for bank loans, but 57% of them were rejected.

The survey, done in the second half of 1998 by the Organization for a New Equality, drew responses from minority businesses in 25 states and the District of Columbia. The organization said it got responses from 200 firms but said the sample is not representative of all such companies.

Of those responding, 69% had used alternative financing methods, such as friends and family, home equity loans, or credit cards. On average, these companies paid interest rates 59% higher than those who got bank loans.

The group made several recommendations.

It said banks should hire more minority group members and that lenders should become more familiar with obstacles minorities often face in obtaining credit, such as less personal net worth and collateral, a more limited credit history, and more frequent job changes.

Finally, banks should design credit products that address these problems, the group said. Loan officers need to give rejected applicants specific advice on how to improve their next loan application, it said.

The Federal Reserve Board, it said, should let banks collect race and gender data on small-business loan applicants and recipients.

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