Programmatic Initiative

Business Starts and Growth

Living Cities Business Starts & Growth is a multi-year initiative designed to support city government leaders and trusted community organizations in Albuquerque, NM, Austin, TX, Memphis, TN, Rochester, NY, Minneapolis, MN, ST. Paul, MN, in accelerating wealth building via business ownership.

Overview

The State of Business Ownership Among Owners from Underrepresented Communities

Small businesses employ nearly half of all American workers. They are the primary source of jobs, they provide a sense of place and neighborhood vitality, and they continue to be drivers of wealth creation in U.S cities.

Despite the lingering effects of the pandemic, a changing policy environment and an uneven adoption of Artificial Intelligence, small businesses continue to have the ambition to grow. However, lack of access to social, knowledge and financial capital consistently sets them back and pushes them to use costly and unsafe loans.

  • 50% denial rate for growth-oriented firms: Among non-employer firms applying for loans, lines of credit, or merchant cash advances, early-stage firms planning to hire were denied at a rate of 50% compared to only 34% for firms with no growth plans.
  • More than half of start-ups are self-financed: When traditional capital doesn’t reach businesses, owners pull from personal savings, retirement accounts, and family resources. Widening the wealth gap.
  • Black business owners pay 3+ percentage points more in interest: Even after controlling for firm risk factors, Black-owned businesses face higher borrowing costs.

The Results

Leveraging Our Expertise

By providing expert technical assistance, leveraging Living Cities expertise in the areas of ecosystem building and inclusive procurement, and deploying grants across cohort cities, the Business Starts & Growth Initiative has helped cities and their local partners design and advance the following data-driven solutions:

  • Invest in community-based business incubators to increase access to culturally responsive technical assistance for business owners. 
  • Support mixed use cooperative ownership models for young entrepreneurs. 
  • Enhance accessibility and navigation of existing city-led business development programs for residents. 
  • Invest in cultivation and pipeline development for developers and general contractors. 
  • Strengthen the Shared Ownership ecosystem for business owners and employees. 
  • Launch a Contractors University to support contractors and maximize their opportunities to partner with city government.

This body of work is made possible by Citi Foundation. To learn more about the Business Starts & Growth initiative, our city-led strategies and intended impact, please contact Santiago Carrillo.

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