Background
When everyone is contributing to and benefiting from our economy, our region will truly thrive. Supporting greater opportunities for Chicagoans from underinvested neighborhoods to own their own businesses is one important step toward that vision.
In the City that Works, small businesses employ approximately 58 percent of workers. Enabling local entrepreneurs to start and grow businesses in underinvested areas creates jobs, which in turn helps people improve their incomes.
By owning a small business, people also can accrue wealth to improve their options and opportunities today and to pass it down to future generations: Business ownership represents 34 percent of non-financial assets in the U.S., according to 2019 data from the Federal Reserve.
The Fund for Equitable Business Growth addresses disparities in access to business funding opportunities and support services.
What Entrepreneurs Need
The needs of underrepresented entrepreneurs are different from those of more privileged entrepreneurs who may already have generational wealth, connections to opportunities, and access to resources that support their growth and longevity. By funding and supporting business serving organizations, the Fund for Equitable Business Growth helps more local entrepreneurs access capital, improve service delivery, and expand their business networks.
Access to capital and expanded business networks
Our research identified a debt-capital gap of upwards of $250,000 for all underrepresented entrepreneurs. That means these entrepreneurs have much less money to start or grow their businesses.
Conversations with underrepresented entrepreneurs have revealed they need resources to support startup activities because they can’t count on friends and family funding for capital investments at the same rates as more established entrepreneurs.
Coordination among business service providers
As an entrepreneur, knowing where to start and where to go for help, funding, training, or certification can be overwhelming. That is why Business Service Organizations (BSOs) need to work together so that entrepreneurs can worry less about where to get assistance and focus more on what they need to do to succeed.
Improved business delivery and enhanced specialized service options
For Business Service Organizations to be helpful to underrepresented entrepreneurs, they must meet the businesses’ specific needs and be easily accessible. That means offering entrepreneurs technical business skills training in things like the basics of financial reporting, such as how to use QuickBooks, and the importance of inventory control.
The Fund for Equitable Business Growth
FEBG was created in direct response to a Next Street study commissioned by JPMorgan Chase, Polk Bros Foundation, and The Chicago Community Trust. The study showed a range of disparities among entrepreneurs, including business ownership, performance, and growth; access to support services and capital; and employment opportunities.