Until recently, William Q. Sarnoe was typical of many small African entrepreneurs--possessing an abundance of undercapitalized hustle but little in the way of discernible economic growth.

Sarnoe ran his small welding business in a grassy field, without shelter from the fierce West African dry-season sun or the deluges of the six-month rainy season, with no hope of getting financing to build a shop and expand his profit margins.

In the small, capital-scarce economies that make up most of black Africa, international organizations and commercial banks are often willing to finance the multimillion-dollar endeavors that come with government guarantees, but for the small-business man with meager resources, whose needs may only run up to tens of thousands of dollars, there is virtually no place to turn for a loan.

Most often in Africa, small retail, wholesale and manufacturing businesses are in the hands of foreigners--mainly Lebanese in West Africa and Indians in East Africa--whose years of sacrifice, long traditions of commerce, ethnic associations and financing from abroad have put them in dominant economic positions. Liberia is typical.

"We have discovered that 75 percent of small businesses here are owned by Lebanese businessmen and, to a lesser extent, Indians," said Maxwell Kaba, small business director of Liberia's National Investment Commission. "The biggest problem for the Liberians to get started and to sustain the growth of their businesses is capital: The banks won't loan them any."

Liberia's commercial banks have "no confidence" in the small Liberian businessman and "require collateral two or three times the principal of the loan," Kaba said. Lebanese and Indian businessmen, on the other hand, have been able to put up their ethnic associations' assets to secure a loan for one of their members, Kaba added. "Liberians have no associations with that kind of wealth."

There also have been abuses of commercial credit by Liberians, Kaba said. "In the past, Liberian officials have taken out loans and because of their powerful positions in the government, have not repaid them. That has built up a lot of resistance among the banks toward the Liberian businessman."

In order to give some first-time financial assistance to small Liberian businessmen like Sarnoe, the World Bank, through its low-interest, "soft loan" International Development Agency, has made available to the investment commission $4 million in loans to capitalize expansion or operations of small and medium-sized Liberian businesses.

But although the loans are 8 percent guaranteed by the Liberian Central Bank, they are still issued through local commercial institutions at a very slow pace. In the two years that the funds have been available, out of 300 applicants only Sarnoe and three other small businessmen have qualified for loans ranging from $16,000 to $50,000.

Sarnoe, 37, a graduate of Booker Washington Institute here, began eight years ago putting together his welding business on a part-time basis while working for Liberia's Local Government Ministry as a construction supervisor. He quit his job in 1981 to work at his business full-time but could not get beyond his open field operation.

A visit to his shop here, five miles outside Monrovia, found him on a scaffold putting the finishing touches on his new one-story, four-room workshop financed by part of the $16,000 World Bank loan he received in February.

"I have not been doing much business since I received the loan because I've been spending all my time on building the shop," Sarnoe said during a tour of the nearly completed cinderblock-walled and metal-roofed building.

Sarnoe's Levan Steel Construction Service has never worked at full capacity so he has never known what his earning potential is. In the open field, his workers would refuse to operate the heat-generating equipment when "the sun beat down on them," he said. They were always looking for lost tools in the grass and work stopped during the rain.

Sarnoe said he was complaining of his plight to a customer one day last year "when he told me there were loans for businessmen like me available through the commission."

Sarnoe applied for $38,000 but commission analysts calculated that he needed no more than $16,000 to build the shop, buy additional equipment and expand his work force from four to seven. He said he had been reluctant to invest in large equipment after a $350 welding machine was stolen from his field one night in 1976.

"Things will be very different for me now," said Sarnoe, smiling. "There should be more business coming soon."