Baltimore Sun’s BEST party in 2 weeks

Nydia Velazquez

Bush is expected to have a tough time ending tiny federal loans that are lifelines to first-time entrepreneurs, particularly minorities and women

Since the beginning of the 1990s, thousands of aspiring entrepreneurs have moved away from unemployment or welfare by borrowing a few thousand dollars - even as little as $500 - to set up their own small business.

Several years ago, Diane Barrett Holloway, a single mother and out-of-work pastry chef, used a $5,000 loan from a local women's economic agency in Silver City, N.M., to start a restaurant in an old storefront, cooking for customers with a scavenged pizza oven and serving them on a half-dozen mismatched tables.

"That money made the difference," said Holloway, whose restaurant, Diane's, is now thriving, with 30 employees. She plans to open two more...