Illinois Small Business Statistics: 2026 Data and Key Trends

Illinois is home to roughly 1.4 million small businesses that employ 2.4 million workers and drive billions in exports. Whether you're launching your first LLC or sizing up the competition, these updated 2026 statistics paint a clear picture of what the Illinois small business landscape actually looks like.

How Many Small Businesses Operate in Illinois in 2026?

The SBA counts any firm with fewer than 500 employees as a “small business.” By that standard, Illinois punches well above its weight. Here's how the numbers break down for the state's overall small business ecosystem.

• Illinois is home to approximately 1.4 million small businesses, which represent 99.6% of all businesses operating in the state (SBA Office of Advocacy, Illinois 2025 Small Business Profile).
• That total includes roughly 1.1 million nonemployer firms (sole proprietors and single-member LLCs with no payroll) and about 253,302 small employer firms with fewer than 500 employees.
• Small businesses employ around 2.4 million workers in Illinois, accounting for about 43.7% of the state's entire private-sector workforce.
• Between March 2023 and March 2024, small businesses created 323,299 jobs at opening and expanding establishments and lost 309,168 jobs at closing and contracting ones, for a net gain of 14,131 small business jobs.
• Over that same period, Illinois saw 35,143 business establishments open and 34,914 close, a net gain of 229 establishments. Small businesses accounted for 33,940 of those openings.
• The median household income in Illinois was about $83,200 in 2024, placing the state around 18th nationally and roughly 2% above the U.S. median.
• Illinois' seasonally adjusted unemployment rate was about 4.6% in December 2025, slightly above the national average.

Top Industries for Small Businesses in Illinois

Not all sectors carry the same weight. Transportation and warehousing leads in sheer number of firms, while healthcare dominates small business employment. These sector-level numbers show where Illinois entrepreneurs concentrate their efforts and where the hiring happens.

Small Business Firm Counts by Industry in Illinois

• Transportation and warehousing leads with about 210,396 small firms, driven heavily by owner-operator trucking and last-mile delivery businesses.
• Professional, scientific, and technical services ranks second with approximately 172,405 firms, including consulting, legal, accounting, and IT services.
• Other services (except public administration) account for about 147,251 small businesses, covering everything from auto repair to personal care.
• Health care and social assistance has roughly 111,845 small firms, while retail trade counts about 107,821.
• At the bottom, utilities has only about 522 small businesses statewide, the smallest sector by firm count.

Small Business Employment by Industry in Illinois

• Small firms in health care and social assistance employ about 343,660 people, representing 41.0% of total employment in that sector.
• Accommodation and food services small businesses employ roughly 318,909 workers, a striking 64.7% of all jobs in that industry.
• In professional, scientific, and technical services, small employers account for about 227,284 jobs, just over half (50.4%) of the sector's total employment.
• Small construction firms employ about 179,229 workers in Illinois, representing 81.8% of all construction jobs in the state.
• Agriculture, forestry, fishing, and hunting has the lowest small business employment, with about 1,175 workers statewide.

Who Owns Illinois Small Businesses?

The ownership profile of Illinois businesses reflects the state's diversity. The SBA and Census data reveal significant participation from women, veterans, and minority entrepreneurs, though gaps persist between ownership rates and workforce representation.

• Women own about 43.3% of businesses in Illinois (combining equal and majority ownership), totaling roughly 517,121 firms. Of those, about 52,121 have employees and 465,000 are nonemployer firms.
• Veterans own approximately 42,711 businesses in Illinois, including about 8,211 employer firms and 34,500 nonemployer businesses. Veterans represent 3.7% of Illinois business owners.
• Hispanic entrepreneurs own around 152,867 businesses in the state, including about 17,867 employer firms and 135,000 nonemployer firms. That's 12.0% of all Illinois businesses.
• Roughly 447,274 Illinois businesses are owned by individuals who are Hispanic or from a racial minority group, including about 399,000 nonemployer firms and 48,274 employer firms.

Small Business Exports and International Trade in Illinois

Illinois sits at a major crossroads for global trade. O'Hare International Airport, the Port of Chicago, and extensive rail networks give small exporters direct access to international markets. The export numbers reflect that geographic advantage.

• In 2023, 19,462 small firms in Illinois exported goods valued at about $17.6 billion, representing 24.0% of the state's $73.4 billion in identified exports.
• Small exporters outnumber large ones by a wide margin, but their average export value per firm is significantly lower than that of large multinationals headquartered in the state.

Small Business Lending and Access to Capital in Illinois

Capital access shapes which businesses survive their first five years and which don't. CRA lending data from the FFIEC provides a snapshot of how much credit flows to Illinois small firms each year.

• In 2023, banks reporting under the federal Community Reinvestment Act issued about $3.3 billion in small business loans to Illinois firms with revenues of $1 million or less.
• Total new business lending through loans of $1 million or less in Illinois reached about $10.1 billion in 2023, including approximately $3.6 billion in loans of $100,000 or less.

Illinois Small Business Tax Rates and Compliance Costs in 2026

Tax structure is one of the first things founders evaluate when choosing where to register their business. Illinois isn't the cheapest state to operate in, but it's not the most expensive either. Here's what small business owners should expect.

Corporate Income Tax vs. Pass-Through Tax for Illinois LLCs

• C-corporations in Illinois pay a 7% state corporate income tax plus a 2.5% Personal Property Replacement Tax on net income, for a combined state-level rate of 9.5%. That ranks second-highest nationally, behind only Minnesota's 9.8%.
• Pass-through entities like S-corporations, partnerships, and most LLCs are generally taxed at the owner level at Illinois' flat individual income tax rate of 4.95%, while also being subject to a 1.5% Personal Property Replacement Tax at the entity level.
• The bottom line: if you're forming an LLC in Illinois, your Illinois LLC formation costs extend beyond the filing fee. Factor in the 4.95% income tax and 1.5% replacement tax on your share of the profits.

Illinois Sales Tax and Minimum Wage

• The statewide sales and use tax rate is 6.25% for general merchandise, but combined state and local rates commonly range from 6.25% to around 11% depending on the jurisdiction. Chicago tops out near 10.25%.
• As of January 1, 2026, the Illinois state minimum wage is $15.00 per hour. Chicago's minimum is higher, at $16.20 per hour for employers with 21 or more workers.

New Business Filings and Growth Trends in Illinois

Illinois' strongest nonfarm payroll employment growth between June 2022 and June 2023 came from education and health services, government, financial activities, and construction. Information and professional/business services showed weaker gains. Those trends shape which types of new businesses are filing with the Secretary of State.

• The total number of registered businesses in Illinois continues to climb. LLC filings remain the dominant entity type for new registrations, far outpacing corporations and partnerships.
• Illinois state law requires every new LLC to designate a registered agent in Illinois who is available during regular business hours at a physical address within the state.
• Before registering, founders should run an Illinois business name search through the Secretary of State's database to confirm their desired name is available.
• Entrepreneurs comparing LLC services in Illinois should note that basic formation requires filing Articles of Organization with the Secretary of State. The state does not require a general business license at the state level, but most businesses must register with the Illinois Department of Revenue for tax purposes.
• Specific industries, including food service, construction, healthcare, and cosmetology, require separate professional licenses through the Illinois Department of Financial and Professional Regulation.

Frequently Asked Questions About Small Businesses in Illinois

These are the questions Illinois entrepreneurs and researchers ask most often about small businesses in the state, based on actual search data and SBA definitions.

What is considered a small business in Illinois?

Illinois follows the federal SBA size standards. For most industries, that means fewer than 500 employees. For non-manufacturing sectors, the threshold is based on average annual receipts, which vary by NAICS industry code. Illinois does not maintain a separate state-level definition.

How many small businesses are in Chicago?

Chicago is home to the largest concentration of small firms in the state. While exact city-level counts shift with each Census update, the metro area accounts for a significant share of Illinois' 1.4 million small businesses, particularly in professional services, food services, and retail.

What are the best industries to start a business in Illinois?

Based on recent employment growth data, education and health services, construction, and financial activities are among the fastest-growing sectors. Professional services also remains strong, with over 172,000 small firms already operating in the state.

How does Illinois compare to other states for small business taxes?

Illinois' combined corporate tax rate of 9.5% ranks second-highest nationally. Pass-through entities pay 4.95% individual income tax plus a 1.5% replacement tax. States like Nevada and Wyoming have no state income tax, which is why some founders consider those options. The tradeoff: Illinois offers access to a much larger consumer base and workforce.

Do I need a registered agent for my Illinois LLC?

Yes. Illinois law requires every LLC and corporation to have a registered agent in Illinois with a physical street address in the state. You can serve as your own agent, but most business owners use a professional service to avoid publishing their home address on public records.

Sources

• SBA Office of Advocacy, Illinois 2025 Small Business Profile – Official state-level data on firm counts, employment, sectors, exports, and business owner demographics.
• U.S. Census Bureau, Profile of U.S. Importing and Exporting Companies – Export statistics by state and firm size, including small business export values.
• Illinois Department of Revenue, Income Tax Rates – Current corporate (7%) and individual (4.95%) income tax rates, plus Personal Property Replacement Tax details.
• Illinois Department of Labor, Minimum Wage Law – State minimum wage schedule and current rate of $15.00/hour effective January 2026.
• FFIEC CRA Aggregate Data – Small business lending volumes by state, reported by banks under the Community Reinvestment Act.