Chicago is a city founded on commerce, industry and ingenuity—from its roots as a transportation and agriculture hub, to its current landscape of high-tech, service, finance and manufacturing sectors. But how are the city’s small businesses sharing in its prosperity?
A newly released market assessment of Chicago’s small and medium businesses finds a supportive environment for growth—but one where not all communities and residents benefit equitably.
Conducted by Next Street and Community Reinvestment Fund, USA, and funded by Polk Bros. Foundation,JPMorgan Chase and The Chicago Community Trust, the research finds continued evidence of a supportive environment for small and medium business (SMB). Over the most recent five-year period there was year-over-year growth in nearly all types of small business financing activity, including debt, equity and grant capital.
At the same time, the study also shows that the fruits of Chicago’s SMB economy have not been shared equally among the city’s residents.
The research uncovered significant disparities along racial, ethnic, gender and geographic lines in the number of businesses, the relative performance and growth of SMBs, access to critical resources and employment opportunities.
While there is a robust spectrum of capital and services available to business owners, access is still largely determined by a business owner’s personal networks and ability to navigate a fragmented, often confusing landscape.
The availability of capital and other resources is not always aligned to the needs of businesses owned by women and people of color, which tend to be earlier-stage.
The research identified a specific debt capital gap in the $50,000 — $250,000 range and a desire for increased grant/equity-like products that could support startup activity for Black and Latinx entrepreneurs, who report limited availability of friends and family funding.
Researchers also noted the prevalence of highly generalized business service offerings, delivered to businesses operating in vastly different industries or stages.
“This is a unique and urgent moment for leaders and stakeholders in the city to consider the supportive roles they can play to improve ecosystem coordination, promote inclusive growth and enable emerging entrepreneurs to grow and flourish,” according to the executive summary.
The report culminates with a set of recommendations and proposed path forward, rooted in the understanding that a healthy, equitable and diverse small business ecosystem is a prerequisite for a thriving economy in Chicago. Download the complete report.