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Data and Insights Reveal Funding Preferences, Gendered Perspectives and Industry Concentration

The Urban League of Greater Chattanooga, with consultants Garrett Harper, PhD and entrepreneurship executive Marcus Shaw, MBA, undertook the research and prepared the assessment. The research team consulted local studies, national research and Census data; compiled survey responses from 62 area Black-owned businesses; and conducted in-depth interviews with selected survey respondents. The following noteworthy findings emerged:

  • Most Black-owned businesses are initially self-funded: Interview participants expressed a clear preference for self-funding. Over half of survey respondents (54%) have never applied for a loan with nearly half (48%) reporting startup capital came exclusively from personal savings. When pursuing growth, Black-owned businesses push the limits of their capacity before considering other funding options.
  • Gender shapes perceptions and experience: Black women business owners outnumber their male counterparts by a ratio of 2-to-1. Women who responded to the survey are more likely than men to perceive gender and race as a “high impact” challenge in business. Woman-owned businesses reported more often than men they perceive finding time to dedicate to strategic planning and to balance their businesses with other work as “high impact” challenges.
  • Black-owned businesses seek access to new markets and access to networks: In retail, restaurant, barber and salon, and services and consulting sectors where an estimated 80% of Hamilton County Black-owned businesses concentrate, owners typically enjoy healthy local demand and enough revenue to replace their own incomes. Interviewees express high interest in government contracts and expansion to markets beyond the region as avenues to scale, hire and find greater economic stability but report limitations to their readiness to pursue these strategies, including low awareness of how to find or respond to government opportunities.
  • Desire for technical assistance in sales, marketing, accounting, and hiring support: One in four respondents identified sales, marketing, accounting as top priority areas for technical assistance. Broadly, respondents expressed high interest in free business coaching, mentoring, and online training. Interviewees worry about growing and developing their workforce, especially as the pandemic continues to impact their efforts.

Recommended Priorities for Strengthening Chattanooga’s Small Business Ecosystem

The assessment culminates in a set of community-informed recommendations for ecosystem partners as they coordinate efforts to offer a broad range of technical assistance to prepare minority entrepreneurs to navigate growth, access capital, and adapt to working in the new digital environment accelerated by the pandemic:

  • Leverage regional partnerships: Help Hamilton County businesses identify and pursue expansion opportunities to other markets in the southeast region.
  • Support transparency for government opportunities: Boost visibility into contract opportunities and access to networks to pursue them by convening government procurement specialists with area businesses positioned to provide services to local, state or federal agencies.
  • Develop clear marketing to communicate the power of loans: Elevate awareness and deepen knowledge of the benefits of loans as a funding strategy for growth-oriented businesses through dedicated, ongoing marketing and communications efforts.
  • Foster trust by investing in relationships: Nurture business and community relationships by engaging with and investing in Black business and communities to foster familiarity with and trust in financial institutions.

To access and read the full assessment, view the summary of findings, or download an executive summary, visit pathwaychattanooga.org.

In June 2021, Pathway Lending launched the $7.5 million Chattanooga Small Business Opportunity Fund and began deploying loans to approved borrowers in Chattanooga. Under the Chattanooga Fund, loans range from $5,000 to $500,000 for working capital lines of credit, term loans for equipment and real estate, and microloans. Pinnacle Financial Partners, First Horizon Bank, and Regions Bank provided capital to establish the loan fund along with grant support from The Benwood, Bobby Stone, Footprint and Lyndhurst Foundations, JPMorgan Chase Foundation and Pointer Management Co.

Entrepreneurs and small business owners interested in learning more about application requirements and loan offerings may contact Quentin Lawrence or Katie Hendrix by phone at (423) 205-3450 or by email at [email protected] or [email protected]

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About JPMorgan Chase

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $3.7 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

 About Pathway Lending

Founded in 1999 and based in Nashville, Pathway Lending is a community development financial institution (CDFI) certified by the U.S. Department of the Treasury. It has grown to become a major lending institution in the Southeast, propelling meaningful economic growth in communities across the region. In 2021, Pathway Lending made more than $57.7 million in loans and delivered 16,557 hours of technical assistance and education. Get to know our mission and the stories of the entrepreneurs and communities we serve at PathwayLending.org.

About Urban League of Greater Chattanooga

The Urban League of Greater Chattanooga is an affiliate of the National Urban League, the nation’s oldest and largest community-based movement devoted to empowering African Americans and other underserved individuals to enter the economic and social mainstream. Since 1982, the Chattanooga affiliate has served many thousands of economically disadvantaged persons, individuals representing communities of color and minority-owned businesses through programs and initiatives that promote educational attainment, economic development, self-sufficiency and inclusive leadership opportunities. For more information, visit ulchatt.net.





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