On behalf of the many contributors who have participated in this research project, we are pleased to share the following assessment of Chicago’s small- and medium-business (SMB) ecosystem. Beginning in 2018, The Chicago Community TrustJPMorgan Chase, and Polk Bros. Foundation partnered to sponsor a comprehensive market assessment on businesses owned by women and people of color, especially those operating on the south and west sides of Chicago.

The core research team included Community Reinvestment Fund, USA (CRF) and Next Street, a mission-driven consulting firm serving small businesses, nonprofits, and the organizations that accelerate their success. CRF and Next Street  joined forces to conduct a rigorous analysis of the challenges and opportunities facing small- and medium-business owners in Chicago. In addition to CRF and Next Street, this project benefited from the counsel of a formal Advisory Committee including a broad range of small business owners, philanthropic and civic leaders, and representatives from capital providers and business service organizations.

Chicago has a long history of industry, ingenuity and commerce, with a unique business environment that enjoys natural competitive advantages based on its location, local industry, infrastructure and workforce. From its roots as a transportation and agriculture hub to its current high-tech, service, finance and manufacturing sectors, Chicago is a city founded on hard work and opportunity.

Looking at Chicago today, we found continued evidence of a supportive environment for small businesses. 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. Moreover, our research included a representative scan of more than 135 business service organizations and over 70 unique capital providers that are active in the Chicago SMB market.

While all of this is true, our research also demonstrates that the fruits of Chicago’s SMB economy have not been shared equally among the city’s residents.

  • The research uncovered significant disparities in the number of business establishments, relative performance and growth of SMBs, access to critical support services and capital resources, and employment opportunities along racial, ethnic, gender, and geographic lines.
  • While there is a robust spectrum of capital and services available to business owners in Chicago, access is still largely determined by a business owner’s personal networks and ability to navigate a fragmented and often confusing landscape.
  • Specifically for businesses owned by women and people of color, which tend to be earlier stage, we identified several gaps in the market where the availability of capital and other resources is not always well-aligned to their reported needs.
  • We found 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.
  • We also noted the prevalence of highly generalized business service offerings, often delivered through a cohort model to businesses operating in vastly different industries or stages.

Read the full report

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