2026 Chicagoland Small Business Ecosystem Reassessment
Executive Summary
Small businesses are a critical part of Chicagoland’s economy. The region is home to 687,000 small businesses, which support more than 1 million jobs. They create jobs, catalyze communities, strengthen commercial corridors, provide essential goods and services, and create pathways to long-term wealth.
Since Next Street’s initial assessment of Chicago’s small business ecosystem in 2018, public and philanthropic investment has grown, business support networks have become more connected, and new approaches to expanding access to capital have emerged. The result is a stronger and more coordinated ecosystem than existed eight years ago. Entrepreneurial activity has increased, with record high business formations in 2020-21.
But greater business activity and access has not translated into greater growth.
Too many businesses still remain undercapitalized, struggle to find the right support, or lack the resources needed to take advantage of growth opportunities. While business formation remains strong, few businesses are reaching the revenue and employment levels associated with sustained job creation and wealth building.
What’s Next for Chicagoland Small Businesses: A Regional Roadmap for Inclusive Growth revisits the region’s small business ecosystem to understand what has changed since 2018, where gaps remain, and where funders, public-sector leaders, capital providers, and business support organizations should focus next.
The report points to a clear opportunity: move beyond expanding access to programs and resources and build a more connected system that helps businesses turn access into growth, jobs, ownership, and long-term wealth.
This report was made possible with support from a funder coalition, including Builders Vision, The Chicago Community Trust, the Coleman Foundation, Crown Family Philanthropies, the Fund for Equitable Business Growth (FEBG), JPMorganChase, the John D. and Catherine T. MacArthur Foundation, and the Polk Bros. Foundation.
Key Takeaways
Chicagoland has strong entrepreneurial activity, but too few businesses are scaling. The region is home to approximately 687,000 small businesses, yet much of the growth since 2018 has come from businesses without paid employees. Employer business growth has remained nearly flat, and half of small businesses generate less than $25,000 annually.
Business growth remains uneven. Chicagoland’s entrepreneurs reflect the diversity of the region, but business growth and ownership outcomes do not. Barriers to capital, networks, customers, and business support continue to shape which businesses are able to grow, hire, transition ownership, and build wealth.
The region faces a significant capital gap. Chicagoland small businesses sought an estimated $43 billion in capital in 2024, while only $8.9 billion was deployed through institutional channels—leaving an estimated $34 billion gap. The need is particularly acute for businesses seeking flexible financing between $50,000 and $250,000 to hire, purchase equipment, expand, or fund working capital.
Business support has expanded, but navigating it remains difficult. Chicagoland has a deep network of business support organizations, public programs, CDFIs, chambers, accelerators, and community organizations. Yet nearly half of surveyed business owners said they primarily find support through trusted personal relationships, compared with just 20 percent who primarily rely on formal business support organizations.
Established and transitioning businesses need more targeted support. Much of the existing infrastructure remains focused on starting or stabilizing businesses. Businesses looking to hire, expand, reach larger customers, raise capital, or transition ownership require more specialized support. This need is becoming increasingly urgent as 52 percent of Chicagoland employer business owners are age 55 or older.
Where Chicagoland Goes Next
The report identifies four areas where coordinated investment can have the greatest impact:
Build a coordinated growth-stage support system that helps established businesses strengthen operations, reach new customers, hire, and scale.
Unlock right-sized and flexible capital, particularly financing in the $50,000–$250,000 range for both main street and venture-backable businesses.
Preserve local businesses through ownership transition by strengthening succession planning, buyer preparation, acquisition financing, and transition support.
Strengthen navigation and ecosystem accountability so businesses can more easily find the right resources—and ecosystem partners can better measure whether those resources lead to meaningful outcomes.
The next phase should focus less on creating standalone programs and more on strengthening and connecting what already exists—making Chicagoland’s small business ecosystem easier to navigate, better matched to business needs, and more accountable for growth.
