Inflation, property taxes, labor shortages and supply chain snarls may be top of mind — but Illinois small business owners nonetheless have much to celebrate this spring. After several years of managing through a very difficult environment, it’s about time that suburban Chicago entrepreneurs had reasons to be optimistic.
Three ways that spring 2022 is delivering long-overdue cheer:
1. Occupational Licensing Reform will reduce licensing costs.
House Bill 5576 signed into law occupational licensing reform that ultimately will reduce the cost of licensing for many small business owners. While licensing can provide a baseline for occupational qualifications that protects consumers, license requirements can also create unnecessary barriers to entry for newcomers — as many entrepreneurs have found.
The new law will require the state to collect key licensing data for the Illinois General Assembly to review and determine whether the requirements should be modified. An especially beneficial dimension of the law is that it encompasses every occupation that requires a license in Illinois, rather than tackling one industry at time.
“This legislation will provide crucial information to legislators so they can better evaluate and when appropriate, eliminate or modify occupational licenses,” said Small Business Advocacy Council president and co-founder Elliot Richardson. “This is exactly the type of legislative action that supports the small business community and fosters the growth of the Illinois economy.”
2. Millennial homebuyers are reviving Chicago suburbs.
The millennials who brought corporate employees into urban city centers are settling down in the suburbs in droves. According to U.S. census data, the populations of lower-density counties around major cities grew by more than 0.8% in 2021.
Nationally, 37% of all homes sold in 2020 were bought by millennials and 54% of those were in a suburb. In greater Chicago, Naperville and DuPage County followed Evanston in attracting the greatest number of new millennial residents in 2021.
Even after the high downtown office vacancies of the pandemic, Chicago real estate is still relatively expensive compared to suburban downtowns — and many suburban downtowns offer attractive shopping and dining options.
Some Chicago suburbs are embracing the concept of the 15-minute city where amenities are within a short walk, bike ride or public transit trip from home and office. As remote work continues to be popular, some large businesses are keeping their downtown offices, albeit downsized, and opening suburban hub offices that are more convenient for millennial workers.
All of these trends bode well for small suburban businesses. While no one can predict what directions COVID-19 will take, the shift of millennials to the suburbs will help increase foot and automobile traffic for brick-and-mortar retailers and restaurants.
3. Small business capital is readily available.
Facing higher costs for talent and production, and longer lead times for goods and services, small businesses need access to working capital — cash, accounts receivable and inventory minus expenses — more than ever. Even in the best of times, a healthy business may have positive working capital, but might not have much cash on hand because it’s waiting to sell inventory or collect payments.
The good news is that liquidity is at an all-time high. Community banks are eager to lend to small businesses when they need credit most urgently to manage around today’s challenges.
The U.S. Small Business Administration is expected to increase its loan guarantee from 85% to 90% of the amount loaned, making banks more willing lend to small business. Business card issuers are increasing lines of credit again, too, especially for sectors like health care, construction, professional services and e-commerce that proved resilient during the pandemic.
With access to working capital, business owners can time inventory purchases to get better prices, avoid payroll crunches and capitalize on any new opportunities in the market. That’s what local community banks are designed to do, because we all have a stake in helping small businesses thrive.
Our suburban entrepreneurs worked hard to stay afloat during the pandemic. Now, as the economy continues pick up steam, it’s time to celebrate the positive trends.
• Stephen Ball is Senior Vice President, Head of Business Banking for Byline Bank.