Chicagoland

However, when Thomas sought a loan from the banks she already had accounts with, what she found was far from reasonable. “The rates and fees were pretty astronomical,” she says. Even though she had three accounts with one local bank, and her credit score ranged from 830 to 850, the loan officer at her bank offered her a loan at 9%. “Most of the banks I tried said loaning money to buy a small business comes at a high price. I figured the ones I have accounts with would be more workable and they weren’t. That, to me, was ridiculous.”

She tried a new loan program offered by the City’s treasurer’s office and was approved for a three-year, $15,000 loan at a rate of less than 4%. She was able to hire six more part-time employees, upgrade from an adding machine to a new point-of-sale system, purchase a new computer, and start a youth entrepreneurship program.

City Treasurer Stephanie Neely says that before she was elected, only one Skyway loan had been issued in several years, so she had the program revamped so small business loans could go as low as $500 or as high as $50,000. Neely also made sure the interest rate did not exceed prime plus 2%. Since 2009, close to 60% of the issued loans–which in 2011 averaged a little less than $18,000–have gone to women and minorities, and to date almost all of the payments are current.

Growth Industries
No single industry truly dominates the Chicago landscape. So while Detroit is rebounding alongside the resurging auto industry, Chicago has floundered in the aftermath of the recession. That, however, does not preclude the city’s capacity for growth in a number of areas. In the coming years, there will be growth opportunities in IT, healthcare, and social assistance, explains Ken Smikle, founder and president of Target Market News.

Smikle says the arrival of major chains such as Walmart and Save-A-Lot are also creating more shopping districts where independent entrepreneurs can establish retail outlets. “Those chains will be anchors around which other retailing opportunities can flourish,” he says. “The opportunity is [happening in] other urban cities around the country, but the development is not happening as rapidly as it is in Chicago.”

With companies such as Groupon–a social discovery website that raised $13 billion through its initial public offering–planting their roots in Chicago, technology is another industry that Chicago entrepreneurs should consider tapping into. “There is no question we are seeing interesting dynamics with technology in Chicago,” says Hobson, who sits on the board of Groupon. “Because of Groupon being located here, that creates a centerpiece for technology entrepreneurs to draw upon.”

(Continued on next page)