The Problem

Small businesses owned by people of color don’t have equitable access to business funding opportunities or support services. Access is still largely determined by a business owner’s personal networks and ability to navigate a fragmented and often confusing landscape.

While capital and business services are available to Chicago-area entrepreneurs, there are clear disparities, especially for Black and Latinx business owners, who tend to apply for smaller loan amounts and have less success securing financing than white business owners. Other reasons capital may be less accessible to entrepreneurs of color include a lack of information, a distrust of banking institutions, or language barriers.

There are clear disparities in access to business funding opportunities and support services for women and people of color.


White-owned businesses represent well over 50 percent (and often up to 70 percent or more) of all establishments in Chicago.

The average white-owned business is valued at more than 12 times the value of the average Black-owned business.

While some white entrepreneurs can rely on family and friends for startup funds, it is much more difficult for an entrepreneur of color to rely on their family network. That is no surprise given that the net worth of a typical white family is nearly eight times greater than that of a Black family—$188,200 vs. $24,100—and more than five times that of a Latinx family—$188,200 vs. $36,100.

Less than 15%

of business establishments in Chicago are Black-owned

Less than 10%

of business establishments in Chicago are Latinx-owned

What Entrepreneurs Need

The needs of entrepreneurs of color 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.

Research has shown small businesses owned by people of color need access to capital and expanded business networks, coordination among business service providers, improved business delivery, and more specialized service options.

Access to capital and expanded business networks

Our research identified a debt-capital gap of upwards of $250,000 for all entrepreneurs of color. That means these entrepreneurs have much less money to start or grow their businesses than their white counterparts.

Conversations with Black and Latinx 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 white 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 entrepreneurs of color, 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 was created to bring funders together in support of a shared mission to reduce Chicago’s racial and ethnic wealth gap.

The Fund for Equitable Business Growth

FEBG was created in direct response to a Next Street study commissioned by JPMorgan Chase, Polk Brothers Foundation, and The Chicago Community Trust, which uncovered significant disparities in:

  • Business ownership when comparing whites to entrepreneurs of color
  • Relative performance and growth of small businesses and access to critical support services and capital resources
  • Employment opportunities along racial, ethnic, gender, and geographic lines

The Chicago Community Trust joined other institutional funders to create FEBG and advance their shared mission to reduce the Chicago region’s racial and ethnic wealth gap.