Small businesses and startups in lower-income parts of the Chicago area have a harder time getting bank loans than counterparts in wealthier regions and often resort to online financing with interest rates so high that it threatens their solvency, said a report issued Tuesday by the nonprofit Woodstock Institute.

The report found that despite an overall increase in bank lending in the Chicago area, small businesses in low-income census tracts or those with a large population of minorities still don’t get a proportionate share of loans less than $100,000.

For example, the report found that 24.5 percent of all businesses in the region are in low- to moderate-income census tracts, yet they received only 19.7 percent of the sub-$100,000 loans from 2015 to 2017, a disparity of 4.8 percentage points.

The results were similar when tracts were screened by population of minorities. Those with 40 percent or more of a non-white population accounted for 48.7 percent of businesses, yet received 42 percent of the loans over the same period, a disparity of 6.7 percentage points.

The disparity was wider in Downstate Illinois markets, which the report also covered. Areas such as Champaign-Urbana-Danville, Moline-Rock Island and Springfield-Decatur showed disparities of more than 10 percentage points. In contrast to Chicago, most of Downstate also suffered from a decline in the number of loans reported under the Community Reinvestment Act from 2000 to 2017.

Deavay Tyler, executive vice president of the Illinois Black Chamber of Commerce and an entrepreneur, said a lack of capital is the biggest impediment for small businesses, especially those owned by minorities. He said the problem is exacerbated by a lack of training for bank loan officers and poor preparation by business owners who can’t afford expert accountants.

Racism is in play in a small percentage of cases, Tyler said. “There’s a perception in the banking community that a loan for a business in the minority community is just going to be harder,” he said. “They don’t give the borrower the benefit of the doubt.”

He added, “The missing link is education on both sides.”

The Woodstock Institute, which researches ways to make financial services more equitable, said the U.S. Justice Department and the Consumer Financial Protection Bureau should examine whether racism is at the heart of the results. It further recommends that all small-business lenders, bank and non-bank, be required to report the race and gender of loan recipients.

Titled “Patterns of Disparity: Small Business Lending in Illinois,” the report builds on similar research Woodstock published in 2017 that involved major cities in the U.S.

It highlights the effect of high interest rates charged by “fintech” operations that offer business loans or cash advances online. Past studies have shown that some can charge interest rates of more than 300 percent, leaving business owners in a bind similar to what individuals can see with payday loans.

“There’s a space for them but there has to be some accountability,” Tyler said. “The standard interest charge is 30 percent, and those are the nice guys.”

Dory Rand, Woodstock’s president, said sensible regulations, including a stronger CRA, are needed to ensure “that it’s no longer the norm that whiter and wealthier neighborhoods receive a disproportionate share of small business loans.”

The report’s data cover only the loan activity of larger banks, which must report their CRA-related business. But even with that limitation, it still covers most small-business borrowing, it said.