Pillar Highlight: Supporting Small Business
June 13, 2024
PHILANTHROPY’S ROLE IN BUILDING A THRIVING, MORE EQUITABLE REGION
Small businesses are critical to the health and vibrance of Illinois communities, driving economic growth: they employ 44% of the state’s workforce — over 2.4 million people — and make up 99.6% of the state’s businesses.¹ Additionally, we know that 68% of every $100 spent at a local business stays in the community, compared to only 43% at a non-local business.
Small Business Support is one of NICI’s three core pillars alongside Economic Mobility and Commercial Development. We focus on the highest need businesses, particularly those owned by women and people of color, as these often face the most significant systemic barriers.
Research shows that some of the main inhibitors to small business success, especially for women and people of color, are lack of access to capital and connections to professional tools and education. While government agencies and programs have traditionally taken a leading role in addressing these needs, the philanthropic sector has an important role to play as well.
ESSENTIAL ACCESS TO CAPITAL AND RESOURCES
One important role, especially now with a number of major government spending bills coming into place, is public-private partnerships, which can leverage philanthropic investments against public funding to expand the capacity of small business capital and education programs.
In fact, we can currently see this play out through the Advantage Illinois — State Small Business Credit Initiative (SSBCI) 2.0 Program, in which the Illinois Department of Commerce & Economic Opportunity (DCEO) will engage with partners who serve historically marginalized communities to offer them loans, loan guarantees, and venture capital funds. In some communities, these public funds are being combined with private and philanthropic support to multiply the effects and support even more small businesses.
In addition to participating in these public-private partnerships, philanthropy can also serve as a resource connector, helping ensure small businesses have access to available resources and funding other net new resources that serve unmet needs. To that end, we want to ensure that small businesses have access to the Illinois Advantage program. If you are a small business owner or know of small business owners who could benefit from this program, please direct them to the Illinois Advantage website that contains more information and a list of participating lenders.
NICI SUPPORTS SMALL BUSINESSES
NICI aims to be a key resource for small businesses in Northern Illinois. We take a place-based approach to ensure funding goes where it is needed most, and provide multi-year commitments to partners. In every community we serve, we collaborate with local stakeholders to leverage our impact.
To strengthen local small businesses, we are forging partnerships with Community Development Financial Institutions (CDFIs). CDFIs are community-based lenders, who are often better equipped to service historically underserved communities. They offer similar interest rates to larger financial institutions but can support businesses with little to no collateral, or low credit scores.
We see working with CDFIs as a critical tool to support small businesses, and that’s why we launched Northern Illinois Community Ventures (NICV), our economic development program focused on NICI’s commitment to invest $1M in loans over the next four years to priority areas Joliet, Rockford, and South Suburban Cook County. Understanding the barriers minority and women entrepreneurs encounter in securing capital as foundational to their business success, it’s our goal to utilize NICV and our partners to help small businesses strive and communities to thrive.