Fund for Equitable Business Growth: A Unique Approach to Building a Successful Small Business Support Network

The Fund for Equitable Business Growth (FEBG) was founded on the principle that small business owners in underrepresented communities would be better served – and would have more success – if the resources they had access to worked collaboratively. We recognized then and now that small business owners in these communities have far less access to resources – including business coaching, financial education, and access to capital – than small business owners in more affluent communities. In 2019, we set out to bring together these resources, provided by BSOs (Business Support Organizations) – nonprofits that offer a wide array of small business support services at little to no cost – to create a small business support network.

Entrepreneurs in Chicago’s underrepresented communities face systemic barriers in accessing capital, knowledge, and the networks necessary for business growth. By investing in the BSOs that support these small businesses, FEBG seeks to narrow Chicago’s racial and ethnic wealth gap and increase generational wealth.

To do this, FEBG provides resources and funding to BSOs, enabling them to improve and scale their entrepreneurship educational and support offerings and develop productive working and learning relationships with other BSOs across the Chicago region.

As a result, individually and as part of a network, BSOs will more effectively assist an expanding number of aspiring, emerging and established business owners in operating and sustaining their businesses successfully. This expanded network of support should result in increases in business profits, business owner wealth, neighborhood economic development, and local employment, which will lead to healthier and safer neighborhoods and a more inclusive economy.

Our model is unusual. Instead of funding individual BSOs, we require that the programs we fund be run by BSO partnerships. In this way, the partners can bring the best of their organizations together to provide more comprehensive support for business owners. These programs may focus on a specific industry, commercial corridor, capital access, or broad business support. Funding collaborative programs was the start of developing a strong and inclusive network. We have taken that further by regularly bringing all the partnerships together for learning and resource sharing.

In 2024, FEBG conducted a five-year evaluation of our flagship program, the FEBG Collective Impact Initiative. Here’s what we learned:

• Approximately 5,000 businesses have been supported.
• We have funded 14 programs through 46 BSOs.
• Our grant recipients have hosted an estimated 14,827 coaching sessions or discussions, 2,080 training sessions, and 284 workshops.
• BSOs have helped small businesses secure an estimated $18 million in grants, $12 million in loans, $1.4 million in lines of credit, and $3 million in equity capital.
• FEBG’s Collective Impact Initiative resulted in a 63 percent increase in the number of small business owners in underrepresented communities supported by BSOs.
• Before 2019, BSOs either disagreed or felt neutral about there being a sustainable BSO network in Chicago where they could share knowledge, resources and support (2.63/5); after participating in the initiative, respondents agree or strongly agree that there is a sustainable network (4.37/5).
• BSOs reported a total of 855 referrals made since the start of the initiative in 2019 (i.e., connecting a BSO to a service, organization, or resource).

As we look ahead to National Small Business Month in May, we remind ourselves that small businesses in underrepresented communities need more support to be successful. Our research told us that a key element of the capital gap is not so much the availability of capital funds, but the business owners’ readiness to access them. So, beginning this year, we are exploring ways to fund programs that provide the tools to help small business owners become prepared to successfully apply for various forms of capital.

Capital readiness support programs not only improve the likelihood of a business owner successfully applying for a loan but also boost a small business owner’s confidence. When she really understands her business’ “numbers” and can speak to them fluently, she can make a greater impact on and develop stronger relationships with lenders and customers.

FEBG’s interest in supporting capital readiness programs stems directly from the Trust’s goal to improve capital access, as highlighted in the Trust’s refined strategic initiatives. Also in line with the strategic refinement, we recognize that paying for back-office services – bookkeeping, accounting, HR legal, etc. – is not cost-effective for many small businesses on their own but could be if multiple businesses shared the services. Likewise, small business growth is challenged by the inability to offer quality benefits to attract employees. With greater funding support, FEBG could explore and implement programs to address these needs.

Here are some recent success stories that describe the impact of the work FEBG funds:

• Janelle Gilbert is the founder and CEO of Chocolate Janelle ja. When she was a girl, she enjoyed her grandmother’s homemade caramel and learned candy-making from her mother (using her grandmother’s secret recipes!). Janelle combined the two to make her Chocolate Oh, So Good! products. To help her learn how to run her business, Janelle took a class from the Urban League in Aurora. They directed her to FEBG grant recipient New Covenant Community Development Corp. (NCCDC, which partners with Sunshine Enterprises). Participating in NCCDC’s cohorts, she learned how to create a solid financial foundation for sustainable growth. Most importantly, perhaps, her new knowledge gave her the confidence to speak directly to lenders and potential customers. Her self-assurance led her to the C-suite at Navistar International, with whom she is in discussion to be a vendor in their corporate headquarters in Lisle.

• Jim Williams, owner of Certified Solutions, joined EMPOWER (a collaborative of Builders Avenue and Greenwood Archer Capital) in early 2023. Jim is an electrician by trade and now focuses on property preservation. In the 2000s, he had a large book of business maintaining bank properties. As bank demand faded, he pivoted into Cook County Land Bank Authority properties. He worked with Builders Avenue to diversify his clients beyond one big contract, learning to bid on a range of jobs (landscaping, tree cutting, flood mitigation) for a range of agencies (including Chicago Housing Authority, Cook County, and the Chicago Park District). Builders Avenue’s Service Partner, Construction Admin Solutions, helped Jim create a repeatable process for efficiently searching for invitations to bid and compiling a full bid package. With his focus on growth, Jim grew his revenues from $521,000 in 2022 to $818,000 in 2023 and projected an additional 30 percent growth for 2024.

In five years, FEBG has become a significant resource to the Chicago small business community, both as a funder and as a thought partner. We have also developed a national reputation for our unique model. With additional resources, there is much more we can be doing to support business owners like Janelle and Jim. Let’s discuss ways you can help us do just that.