As we move forward into a new year, the health of our economy is still one of the biggest challenges facing the nation. Unemployment is still high and new job creation is still slow. While many are looking to the health of large corporations as an indicator of the economy, they should actually be focusing on small businesses. Since the mid-1990s, small businesses have created 60 to 80 percent of the new jobs in our country.
Supporting small business growth is critical during economic downturns like the one we're currently experiencing today. The smallest companies often create the most jobs in during a recession. And one of the fastest growing segments of small business owners in our country is women, making the success of women-owned businesses key to getting people back to work and growing our economy.
There are approximately 10 million women-owned businesses in the United States. This number has grown at twice the rate of all U.S. firms--23 percent compared to 9 percent. According to the U.S. Census 2007 Survey of Business Owners, women owned 7.8 million businesses and co-owned 2.3 million businesses, representing 28.7 percent of all companies in the United States. In Illinois, small businesses make up almost half of all employers, and women represent a third of all small business owners. Cook County also has the 2nd largest number of women-owned businesses in the country behind Los Angeles County at approximately 165,000.
The payoff from supporting small businesses is increasingly important for states like Illinois with double digits unemployment and increasing budget deficits. A state's ability to generate small businesses impacts gross state product, personal income and employment.
Like all businesses, however, small businesses are struggling to weather the downturn in the economy. Some of their biggest road blocks are lack of funds to expand, decreased customer bases, and lack of access to credit and business loans due to tougher lending standards. These issues are especially critical for women business owners, whose greatest challenge has been access to capital, credit and equity. These results highlight the importance of programs that effectively reduce the costs of borrowing and increase net profits in fostering the growth of small businesses, especially women-owned businesses.
In February, President Obama signed the American Recovery and Reinvestment Act, which increased funding for the U.S. Small Business Administration (SBA) by $730 million. A portion of that increase lowered the fees for SBA-guaranteed loans. This act was a great first step toward helping more women secure capital, but we'd like to see more local initiatives like this support women business owners in Illinois.
Small businesses will continue to play a huge role in our economy's recovery efforts. As the economy slowly begins to strengthen, I ask you to support women-owned businesses and encourage our city, county and state governments to continue investing dollars and resources toward their growth. When a woman is empowered to achieve success, she gives back exponentially to her employees, family and neighborhood. Supporting women-owned businesses will not only improve our economy, it will also improve our community.