By: Business In Chicago

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The final information is subject to the latest release from the following official websites:

Launching a new business in Chicago, Illinois, can be an exciting yet challenging endeavor. To support entrepreneurs in their journey, both the state of Illinois and the city of Chicago offer various entrepreneurial funds and financing assistance programs. In this guide, we’ll explore the valuable assistance that entrepreneurial funds can provide, considerations during the application process, and important reminders to help business owners manage risks and avoid situations where they may struggle to repay startup funding.

1. Overview of Entrepreneurial Funds in Illinois and Chicago

Illinois and the city of Chicago have recognized the importance of fostering economic growth and supporting the entrepreneurial ecosystem. Various funds and programs exist to provide financial assistance to startups and small businesses. These funds may come in the form of grants, loans, or equity investments, each tailored to meet specific business needs.

2. How Entrepreneurial Funds Can Help Your Business

  • Seed Capital: Many entrepreneurial funds offer seed capital to help businesses cover initial costs such as equipment, marketing, and hiring.
  • Working Capital: Funding assistance can support day-to-day operations, ensuring a smooth start and allowing entrepreneurs to focus on growing their business.
  • Market Expansion: Some funds target businesses looking to expand their market presence. This can involve entering new markets, launching new products, or scaling existing operations.
  • Technology Adoption: Funds may be available for businesses looking to adopt new technologies or enhance their digital capabilities, staying competitive in a rapidly evolving business landscape.

3. Application Process: Key Considerations

  • Eligibility Criteria: Carefully review the eligibility criteria for each funding program. Ensure your business meets the specified requirements before initiating the application process.
  • Documentation: Prepare all required documentation thoroughly. This may include a comprehensive business plan, financial statements, and details about the proposed use of funds.
  • Legal Compliance: Confirm that your business is in compliance with all relevant regulations and licensing requirements. Failure to adhere to legal standards could jeopardize your eligibility.

4. Risk Management: Navigating Potential Challenges

  • Financial Planning: Develop a detailed financial plan that includes how the funds will be utilized and a realistic projection of future revenues. This helps manage expectations and reduce the risk of financial strain.
  • Market Analysis: Conduct a thorough market analysis to understand potential challenges and opportunities. Knowing your market can help you make informed decisions and mitigate risks.
  • Legal Advice: Seek legal counsel to review funding agreements. Understanding the terms and conditions of funding is crucial to avoid unexpected challenges in the future.

5. Repayment Considerations: Avoiding Financial Strain

  • Understand Terms: Clearly understand the terms of the funding, whether it’s a loan, grant, or equity investment. Be aware of interest rates, repayment schedules, and any equity stakes involved.
  • Realistic Projections: Base your repayment plans on realistic business projections. Avoid overestimating revenue or underestimating expenses to ensure your business can meet its financial obligations.
  • Diversify Funding Sources: Consider diversifying your funding sources to reduce dependency on a single channel. Explore additional financing options to complement the support from entrepreneurial funds.

6. Conclusion: Strategic Financing for Business Success

Financing assistance from entrepreneurial funds in Chicago, Illinois, can be a game-changer for startups and small businesses. By approaching the application process thoughtfully, managing risks proactively, and having a clear understanding of the terms and conditions, entrepreneurs can leverage these funds to build a strong foundation for business success. Remember, strategic financial management is key to ensuring your business thrives and grows in the competitive landscape of the Windy City.

Below is a list of current funding opportunities we curated:

Illinois Small Business Emergency Loan Fund

DCEO and the Illinois Department of Financial and Professional Regulation (IDFPR) are establishing the Illinois Small Business Emergency Loan Fund to offer small businesses low interest loans of up to $50,000.

Businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 will be eligible to apply. Successful applicants will owe nothing for six months and will then begin making fixed payments at a below market interest rate for the remainder of a five-year loan term.
Learn more about eligibility and how to apply here.

Downstate Small Business Stabilization Program

To support small businesses in downstate and rural counties across Illinois, DCEO is repurposing $20 million in CDBG funds to stand up the Downstate Small Business Stabilization Program. This Fund will offer small businesses of up to 50 employees the opportunity to partner with their local governments to obtain grants of up to $25,000 in working capital. These grants will be offered on a rolling basis.
Communities can learn more about the Notice of Funding Opportunity (NOFO) and eligibility requirements here.

Small Business Improvement Fund (SBIF)

The Small Business Improvement Fund (SBIF) provides grant funding for permanent building improvements and repairs across the city.

Offered by the Department of Planning and Development (DPD) to tenants and owners of industrial and commercial properties, SBIF grants are funded by Tax Increment Financing (TIF) revenues in designated TIF districts citywide.

Program participants can receive grants to cover between 30 percent and 90 percent of the cost of remodeling work, with a maximum grant of $150,000 for commercial properties and $250,000 for industrial properties. The grant, which is administered by SomerCor on the City’s behalf, does not have to be repaid.

Who is eligible?

  • Business properties located in a TIF district where SBIF funds are available and the SBIF is open for applications
  • Commercial businesses with gross annual sales up to $9 million on average over the previous three years
  • Commercial property owners with net worth up to $ 9 million and liquid assets up to $500,000
  • Industrial businesses with up to 200 full-time employees
  • Residential projects are not eligible for SBIF grants

Learn more about Eligibility

When are grants available near me?

SBIF applications are submitted during monthly rollout periods for individual TIF districts. Upcoming dates listed.

The application must be submitted to DPD’s program administrator, SomerCor. For additional program information or application assistance, visit the SomerCor website at www.somercor.com/sbif.

Bank of America, Small Business Down Payment Program

Dedicated to women and minority-owned businesses, this non-repayable grant is for up to $25,000 on SBA owner occupied commercial real estate loans for business locations within select areas.

Eligibility

  • Self-identify as a minority or women-owned business (representing at least 51% ownership of the business)
  • For purchasing owner-occupied commercial real estate via our SBA solutions

Please note: this grant program is currently available for OOCRE (Owner-Occupied Commercial Real Estate) purchases within the following areas:

  • Chicagoland area, Charlotte, Dallas, Atlanta, and Los Angeles.

If you have any other questions, please speak with a BoA Small Business Specialist today, by clicking here. For any applicants who are looking to purchase a commercial property in the Chicagoland area, please contact local SBA BDO: Aneta Mazur at [email protected].

LISC and Uber Eats, Black Restaurant Fund

The Black Restaurant Fund provides growth capital to Black restaurants and those serving the Black community. Growth Capital is an innovative financing product that gives business owners the time they need to invest in and stabilize their companies. Unlike loan products, growth capital does not have fixed repayment terms; instead it is designed as a long-term investment where businesses repay only when they are successful in growing their revenue.

The Black Restaurant Fund aims to:

  • Build wealth for Black restaurant owners
  • Create and retain sustainable jobs
  • Build a track record of success for small business owners to attract future investment dollars
  • Offer flexible re-payment terms based on revenue and mutually agreed-upon targets

Eligibility

  • Black-owned restaurants and those serving the Black community
  • Earning annual revenues above $250,000 and below $3,000,000
  • In operation for at least two years, with an ability to deploy capital toward business improvement and growth
  • Active Uber Eats partner (verified by Uber)
  • Located in an economically disadvantaged community

LEARN MORE HERE

High Road Kitchens

Executed by One Fair Wage and City of Chicago

One Fair Wage in partnership with the City of Chicago has launched the High Road Kitchens program, offering grants between $10,000 and $30,000 to Chicago restaurants.

Eligibility

  • Restaurant located in Chicago
  • Annual revenue of under $3 million
  • Experienced financial loss due to COVID-19 totaling 25% of annual revenue

Application Deadline

Rolling basis

APPLY HERE

Cleveland Avenue State Treasurer Urban Success Fund (CAST US)

A $70M initiative that will bridge the capital and resource gap impacting Black, Latinx, and women entrepreneurs in Chicago’s South and West Side neighborhoods.

CAST US will leverage the investment and entrepreneurial development expertise of Cleveland Avenue to support this historically underserved group and empower underrepresented entrepreneurs.

Ideal Candidates

  • Founded by Black, Latinx, and women entrepreneurs
  • Headquartered (or have significant business operations) in the South and West Side neighborhoods of Chicago
  • Representing any industry and seeking early-stage growth capital
  • Currently in operation (generating revenue)

Prepare to Apply

Applications will be segmented based on the size of the grant. Grant requests should represent no more than 75 percent of the anticipated total project cost.

Interested in partnering with CAST US to grow your business?

LEARN MORE & APPLY HERE