This guide is designed for city policymakers, economic development officials, and key partners to understand what interventions have been proven to work, which programs are promising but lack a rigorous review, and how often cities use these programs.

Why This Matters

Small businesses play a critical role in cities by creating jobs, leading innovation, and fostering a sense of place. And small businesses are one of the few ways for households to build wealth, which can be passed on to the next generation. But creating and growing a small business is difficult, and business owners face hurdles to survival and growth.

City leaders can help small businesses overcome these challenges and thrive. There are hundreds of program and policy interventions for cities to choose from, but limited evidence on what actually works.

What We Found

Cities need to design programs based on their policy goals and the types of small businesses they are seeking to serve. A review of policies and programs reveals the following:

• Among programs designed to support access to capital: Lending programs, especially subsidized small business lending through mission lenders, are promising. Microloans show some benefits for owners and their firms, though few microbusinesses grow significantly. Research and development grants show strong impacts.
• Among programs that provide technical assistance: Incubators and accelerators show positive effects (incubators improve survival and growth; accelerators support high-growth start-ups). Coaching, counseling, and mentoring programs are promising.
• Among programs to help access real estate: Programs that create permanently affordable commercial space are promising but costly. Storefront improvement programs, eviction prevention assistance, and legal aid are promising. Direct rent subsidies, tax relief, and rent control lack research support.
• Among other policy tools available to cities: Streamlined licensing, targeted procurement preferences, and carefully structured tax incentives can be low-cost levers to help small businesses, but more research is needed on long-term impacts.

How We Did It

To develop this guide, we reviewed research literature and programmatic reports and data. We also drew from lessons learned through our prior research in this field, notably from interviews with small business owners, lenders, small business advisers, and city leaders. We synthesized findings to draw overarching conclusions and guidance for localities.