A new report by a Chicago-based nonprofit research and policy organization revealed widespread racial and economic disparities in small business lending throughout Illinois.

The Woodstock Institute’s “ Patterns of Disparity: Small Business Lending in Illinois ” showed that businesses in nonwhite communities received fewer business loans and smaller loan amounts than their counterparts in predominantly white communities. The report, released Tuesday, also revealed similar disparities between businesses in lower-income areas and those in higher-income areas.

The analysis included business loans under $100,000 reported by banks as a requirement of the federal Community Reinvestment Act (CRA). The analysis covered about 600,000 loans issued in Illinois between 2015 and 2017, with breakouts for the Chicago region and eight downstate regions.

Statewide, those disparities cost nonwhite communities and lower-income areas tens of thousands of loans and hundreds of millions of dollars over the three-year study period, according to the report. The report unveiled disparities in all nine regions with the bulk of the impact felt in the Chicago region, which the nonprofit defined as Cook, DuPage, Kendall, McHenry and Will counties.

In the Chicago region, if businesses in census tracts where the nonwhite population exceeded 40% had received loans and loan amounts in proportion to their share of businesses overall in the region, they would have received 28,000 more loans and an additional $350 million over the three-year period, according to the report.

Additionally, in the Chicago region, if businesses in census tracts where the median income is less than 80% of area median income had received loans and loan amounts in proportion to their share of businesses overall in the region, they would have received 20,000 more loans and an additional $370 million over the three-year period, the report said.

Small businesses can have a profound impact on the economic vitality of their communities, but they need access to capital in order to thrive, according to the report’s authors, Lauren Nolan and Brent Adams.

“Businesses that have access to adequate levels of capital grow more rapidly, hire more workers, and make more investments than businesses without access to capital,” the authors wrote. “Unfortunately, many businesses struggle to access traditional bank loans and instead are forced to turn to more costly forms of credit, such as personal credit cards or high-interest online loans.”

The report also shared data for the Bloomington, Carbondale, Champaign-Urbana/Danville, Metro East, Moline/Rock Island, Rockford, Peoria and Springfield/Decatur regions. The Metro East region includes Illinois counties in the St. Louis metro area.

In its report, the Woodstock Institute offered several recommendations to address the lending disparities. They include investigating potential discrimination, requiring small business lenders to divulge the race and gender of loan applicants, increasing funding for programs that support lending in underserved communities and strengthening enforcement of the CRA among others.

Alden Loury is the senior editor of WBEZ’s Race, Class and Communities desk. Follow him @AldenLoury.