JENNIFER RIVERA started cooking when she was just nine years old. While growing up in Puerto Rico, she and her cousins flocked to her grandmother’s house after school each day for a meal. There, she fell in love with her grandmother’s recipes.

Rivera, 39, came to Western Massachusetts in 1997 when she was 11 years old. Growing up in poverty, she was no stranger to struggle. Like many people of color who have historically been pushed into self-employment, her mother sold perfumes to support her family. She recalled taking trips to New York as a teenager to sell lip glosses, purses, sneakers, and clothes with her mother. As she got older, she began selling fruit arrangements instead.

“The low-income family always has to have a hobby or something that can bring in extra money on the side,” Rivera said.

When she was 18, she gave birth to her first daughter. As a young, single parent, she did not have the means to go to college. For over a decade, she worked overnight shifts as a certified nursing assistant to support her daughter. Then, she landed a job at the Springfield Police Department as a domestic violence advocate making $40,000 a year.

But Rivera’s love for Caribbean cuisine never dwindled, and in 2016, she began catering on the side to make extra money.

“As a young adult I did a lot of cooking for people, but I never thought of myself as a business owner,” she said.

Slowly, she developed a name for herself, and in 2022, she established her LLC. By 2024, she had given birth to her second daughter and quit her job at the police department. While taking care of her disabled father in Holyoke — where 27 percent of residents live below the poverty line, which is 17 points higher than the statewide average — she found a downtown storefront that was up for rent.

With a $60,000 loan from Common Capital — a small community development financial institution in Western Massachusetts that lends to low and moderate-income entrepreneurs like Rivera — she opened Jenni’s Kitchen on Maple Street in March 2025. She often jokes that she gave up a nine to five to instead work 24/7.

“Opening up the business was kind of like a guarantee that I was going to be able to have a future where I can live comfortably and do something for my kids,” Rivera said. “I don’t go to sleep overthinking if I can afford something.”

She made $130,000 from the bistro in the first year. Now, she is a soon-to-be homeowner and has been able to pay for her 21-year-old daughter’s college education — an opportunity she herself didn’t have.

“I want a legacy for my family,” Rivera said. “I am a first-generation homeowner, first-generation business owner, and my daughter is a first-generation college student.”

Gateway Cities — regional urban centers that suffered from the decline of manufacturing in the decades since World War II — are where many families, immigrants, and minorities like Rivera begin their climb to the middle class. Yet high levels of concentrated poverty in these post-industrial era cities — home to 40 percent of the state’s foreign-born residents — often serve as obstacles to a middle-class lifestyle.

“Those entry-level, traditional manufacturing jobs went away, college started to become less affordable, and a lot of these bigger businesses left the area — so what opportunity is there for people in the middle class? It’s starting their own business,” said Aaron Vega, president of the Western Massachusetts Economic Development Council.

For years, small business ownership has served as a gateway to the middle class, particularly for residents in Gateway Cities like Holyoke where economic mobility is otherwise limited and educational attainment is low. These groups shoulder the accompanying risks and heavy demands of entrepreneurship, often because poverty and discrimination have left them with fewer career alternatives.

“Entrepreneurship is frequently a chosen path for women and BIPOC residents to build economic security and professional growth outside of traditional systems that may have become inaccessible or unaffordable,” said Samantha Carr, program manager at the Center for Women and Enterprise.

Small businesses create jobs, keep money circulating locally, and support inclusive economic development, making them a key driver of middle-class growth. Reviving the blighted downtowns and main streets that were once the booming hearts of Massachusetts’s industrial cities also hinges on small business growth.

But since the pandemic, experts and advocates have warned that Massachusetts’s small businesses are struggling to survive as rising costs, insufficient access to capital and affordable loans, and other challenges have hindered growth.

While entrepreneurship can be a path to building generational wealth, it is, for some, simply becoming a way to make ends meet.

“We open up businesses out of need. It’s not like we wake up one day and say, ‘I’m going to quit my job to make wigs, or sew clothes, or make cookies,’” said Sheila Coon, a Puerto Rican business owner and mother of seven who opened Hot Oven Cookies in Holyoke in 2016. “We do it because we have to feed our kids, and we do it because we have to survive.”

Established as a textile and paper manufacturing center, Holyoke — nicknamed “the Paper City” — became the largest producer of paper goods in the country by 1885 and was home to some of the largest silk and alpaca wool mills in the world. During the early 1900s, there were more millionaires per capita in Holyoke than anywhere else in the country. Its local economy was booming and jobs were plentiful — until they weren’t.

The city experienced the height of the Industrial Revolution, as well as the fall. Immediately following World War II, manufacturing began moving overseas, and generations of mill workers began leaving the city. The declining population depressed the local and regional economy for decades.

But in the mid-1950s, even as manufacturing jobs dwindled and more white residents left to buy homes in the suburbs, Holyoke began receiving a steady influx of primarily Puerto Rican migrants. (Today, half of Holyoke’s residents are Puerto Rican — the highest percentage in any city outside of Puerto Rico itself.) They were seeking agricultural or factory work in the Pioneer Valley’s “mill cities” where there was a surplus of housing formerly occupied by mill workers and their families. Those who lived in low-income neighborhoods and cities like Holyoke with significant numbers of racial and ethnic minorities were denied financial services like credit and insurance. The discriminatory practice — which began in the United States in the 1930s and became known as redlining — was outlawed by the federal government in 1968, but it prevented generations of minorities from accruing wealth.

The city’s median household income is $54,000 — a little more than half of Massachusetts’s median household income of $104,000, which is the highest in the nation. (A single adult in Massachusetts needs an annual income of at least $82,000 to sustain a middle-class standard of living, according to research published by the MassINC Policy Center, which is part of the same organization that publishes CommonWealth Beacon.) One-fifth of the city’s residents live in neighborhoods with highly concentrated poverty, where the poverty rate exceeds 30 percent.

“Concentrations of poverty at that level dramatically reduce the likelihood of people moving up into the middle class,” said Ben Forman, the Policy Center’s research director.

Financial anxieties continue to climb among the middle class, but Gateway City residents are particularly vulnerable. A recent survey of 854 Massachusetts residents conducted by the MassINC Polling Group for WBUR and CommonWealth Beacon found that 41 percent of respondents in Gateway Cities said they were securely in the middle class compared to 58 percent of respondents in non-Gateway Cities. Of those in Gateway Cities, 26 percent said they were in danger of falling out of the middle class compared to 15 percent of non-Gateway City respondents — a reality that presents another challenge for cities like Holyoke where middle-class growth is already difficult to sustain.

“When people’s economic situations improve, they move out of the Gateway Cities,” Mayor Joshua Garcia told CommonWealth Beacon. “It creates a bit of a challenge for communities like Holyoke to create a thriving environment.”

Downtowns and main streets, which are often where the amenities that attract residents and families to any given community are found, are also struggling. In these areas, walkability, density, safety, cultural identity, and variety directly impact the success of small, storefront businesses.

Yet the economics have become challenging as they compete with online retailing, which has exploded since the pandemic and exacerbated the lack of foot traffic on main streets. Today, most businesses need an online revenue stream to keep up. Small business owners like Rivera do not have the resources to create a website or sell meals through apps like DoorDash. Instead, she relies on social media to market her business.

Other stresses on downtowns, especially growing homelessness, have impacted the perception of safety, particularly in cities like Holyoke where unsheltered homelessness hit a new record this year.

Rivera’s bistro is located just off of High Street where street lighting is sparse. Homeless residents, some of whom receive care at Holyoke Health Center’s opioid treatment clinic next door, often camp outside her storefront.

Some mornings when she arrives at the bistro, she has to wake them up. She switched to a grab-and-go business model with no seating to avoid those who would otherwise sleep or linger inside Jenni’s Kitchen. It affects her business, she said, but she remains respectful.

“Everyone deserves a place,” she said. “But it becomes a little too much sometimes.”

High Street has historically served as Holyoke’s commercial corridor. Its proximity to churches, parks, a canal walk, a medical center, and City Hall, as well as its density, has made it the long-term focus of economic development experts like Kevin Moforte who are trying to transform the blighted area into a thriving small business hub.

For the last three years, Moforte has served as Holyoke’s full-time Transformative Development Initiative (TDI) fellow. The program — only available to Gateway Cities — is led by MassDevelopment, a state agency dedicated to improving economic growth. Fellows provide on-the-ground expertise, grants, and technical assistance for a three-year period to help support small businesses, real estate development, and arts and culture projects in a designated downtown district.

Some 13 new businesses have opened in the High Street TDI district since 2022. Moforte has tried to recruit a variety of different shops and storefronts to the corridor to avoid an oversaturated market with too many businesses competing in the same niche.

To increase foot traffic, Moforte has focused on urban beautification. Through the program, nearly 20 new trash cans were placed up and down the street, reducing litter. TDI has also landscaped a handful of otherwise unattractive vacant lots by installing art in the windows. Nine TDI Equity awards — grants of up to $250,000 for real estate projects that activate and improve commercial spaces within TDI districts — have been distributed in the High Street district, including one for renovations at Rivera’s bistro.

Smaller grants have also been distributed to a number of storefront owners, helping them invest in things like new signs, windows, or outdoor lighting.

Jazmin Feliciano, a Puerto Rican resident who opened Holyoke Nutrition on High Street in 2024 after she was laid off from her job at an insurance company, received one of those grants for a new sign outside her small storefront. “It’s a little hole in the wall,” she said of her wellness bar that offers healthy snacks and beverages. “It’s a challenge just to be in Holyoke. It’s so tough to get the foot traffic.”

With TDI assistance, she started offering free Zumba and workout classes in her shop, which brought more people downtown to Holyoke Nutrition — many of which bought energy drinks, teas, and protein shakes after the classes.

Everything from insurance and utilities to the cups, labels, and ingredients Feliciano uses has gone up in price, yet her prices have remained the same.

“I understand people don’t have all this money to spend, and it’s already challenging to get them in the door as it is,” she said.

Feliciano has instead cut things like Wi-Fi and landline service from her shop. She cannot afford to hire employees and instead relies on one volunteer. For now, nearly every dollar of the roughly $3,500 she makes a month is being reinvested back into the business. She worries that her rent — which is $1,500 a month — will soon increase.

“It is very tough, and the money is very low. But for me, it’s like a million bucks every time I sell a tea,” she said. “Whether I sell a lot or a little, for me, it’s about keeping the doors open and keeping my spirits up. I still turn the key and walk in and almost cry, because I’m like, ‘Wow, this is me. This is little Jazmin that grew up in the projects on welfare.’”

Feliciano, 42, grew up in public housing and gave birth to her first son when she was 17 years old. She earned her GED in her late 20s and later worked at a cleaning company while earning an associate’s degree.

“My upbringing was like the bottom of the pit,” she said. “I wanted to do better. I had to do better.”

She used her severance pay and personal savings to open Holyoke Nutrition because she, like many other first-time entrepreneurs with low credit scores and few assets, couldn’t get a loan from her local bank. She was also unemployed at the time.

Her experience underscores the difficulty entrepreneurs of color face when trying to access capital, which is critical for small business growth. The estimated annual unmet financing demand from entrepreneurs of color in Massachusetts is at least $603 million, according to a 2024 study published by P2 Advisors and MassINC Policy Center.

By measure of median household income, Black, Latino, and Native American residents in Massachusetts earn just two-thirds of what their white counterparts take home, limiting their ability to build wealth. White residents accounted for roughly 87 percent of business owners in 2023 while making up 67 percent of the state’s population, according to the US Census Bureau’s most recent Annual Business Survey. Black residents accounted for nearly 3 percent of business owners while making up 7 percent of the population, and Hispanic residents accounted for nearly 5 percent of owners while making up roughly 14 percent of the population.

“These figures are not abstract. They translate directly into differences in who can self-finance a startup, who can secure a loan on reasonable terms, who can withstand a temporary downturn, and who can scale from a sole proprietorship into an employer. The racial wealth gap is also a racial entrepreneurship gap,” Juan Vega, assistant secretary for communities and programs for the Executive Office of Housing and Economic Development, said during a March 31 hearing at the State House.

A 2025 MassINC poll of small business leaders in the state found that 68 percent of Black business owners and 70 percent of Latino business owners identified getting capital as a high priority compared to 32 percent of white business owners. Of the respondents in Gateway Cities, 49 percent identified getting capital as a high priority compared to 36 percent in non-Gateway Cities.

And, studies have shown a direct relationship between the number of small business loans awarded and income growth in a region.

In 2021, 12 percent of businesses in Massachusetts were located in low-income neighborhoods, yet those businesses received just 8 percent of reported small business loans of $100,000 or less, according to a report released in 2024 by the Partnership for Financial Equity, a nonprofit group of community organizations and financial institutions. In Gateway Cities specifically, 42 percent of businesses were in low-income neighborhoods with 29 percent of reported small business loans going to those businesses.

Community development microlenders are often a lifeline for disadvantaged or inexperienced entrepreneurs that are deemed “unbankable.” Over the last seven years, Common Capital has awarded 14 loans to small businesses in Holyoke, including Jenni’s Kitchen.

“Many of our borrowers are coming from marginalized communities. Those populations have not enjoyed as much access to mainstream finance and are also looking, typically, to build generational wealth so they have something to hand off to their children — something they didn’t enjoy from their own parents and grandparents,” Common Capital president Raymond Lanza-Weil said.

If Common Capital hadn’t taken a chance on Chris Elliott and his wife, he said they wouldn’t be where they are today. They started Elliott Fire Sprinkler Systems, a contractor specializing in building and fire safety, out of their kitchen in 2019. With the loan, they opened an office on Main Street in Holyoke. Common Capital also helped them with grants and technical assistance so they could build a website and learn bookkeeping.

“Before and during Covid, we were up to 11 employees. At this current time, we are down to my wife and myself,” Elliott said.

But despite the pandemic-induced challenges, the couple used the fire sprinkler company to launch another small business, C Elliott Developers, focused on renovating vacant properties into market-rate housing.

Elliott, a father of seven, was born and raised in a blue-collar family in Holyoke. He is no stranger to the blight, homelessness, and graffiti downtown. To date, the couple has rehabilitated nearly a dozen properties around the city, including their new office on Maple Steet, which had been vacant for 17 years.

Owning the businesses allowed them to help their kids pay off their student loan debt and “get a better start in life.”

“We’re semi-retired now. I spent a lot of years doing 60, 80, even 100-hour weeks to build the business, and now we’re able to step back,” Elliott said. “We’ve taken a few vacations, we’ve cleared our mortgage on our house, and it has allowed for a slower lifestyle as we age.”

The state’s small business community is at a critical inflection point. A 2025 survey of members of the Retailers Association and other small-business organizations conducted by the UMass Donahue Institute found that operational costs have increased for 91 percent of respondents, with 76 percent confirming that their expenses are rising faster than sales. More than half of respondents said they were very likely or somewhat likely to sell or close their businesses within the next five years.

“To open that door, to hire people, to make the investment in your inventory — it’s a risk,” said Jon Hurst, president of the Retailers Association of Massachusetts. “It’s probably a bigger risk than it has been for many generations.”

Massachusetts has some of the highest costs of living in the nation, which limits residents’ disposable income and purchasing power on main streets, Hurst said.

“Not only are the customers spending less, the small businesses themselves also have the very same cost pressures,” Hurst said. “Payroll, rent, taxes, electricity, utility bills, health insurance — all those things are getting too expensive for a lot of these small businesses.”

As of fiscal year 2026, commercial tax rates increased in a third of the state’s municipalities. Holyoke has the highest commercial tax rate in the Commonwealth.

Like many other business owners, Rivera has struggled to keep her prices down amid a sea of rising costs. Instead, she has, at times, reduced meals, served less, and cut items like eggs from her menu.

“We are in a community where the working person is not able to afford certain things, so when you change the prices, it’s very hard. You stop making money,” she said.

Prior to the pandemic, entrepreneurs of color were launching an increasing number of small businesses in Massachusetts. Businesses launched since 2020, including in cities like Holyoke, are disproportionately owned by Black, Latino, women, and immigrant entrepreneurs. On average, Black and Latino-owned businesses are smaller, newer, and more likely to be looking to expand. Those owned by women and people of color were hit particularly hard by the pandemic and reported greater financial losses.

Since the end of March, Jenni’s Kitchen has been closed for renovations totaling $40,000. A new ventilation system — priced at $20,000 — is being installed to satisfy local health codes.

“I cleared my entire savings to keep this place open,” Rivera said, despite receiving a TDI grant for the renovations. “For many weeks, I couldn’t pay my mom and my aunt, who are my two full-time employees.”

Holyoke is hoping to build more market-rate housing in the city to stabilize its tax base and ultimately create a more mixed-income community that will in turn help its small businesses. Hundreds of units are just a few years or months away from being completed.

“Ideally, you will then have people with some disposable income that can invest in services from the mom and pops in the downtown area,” Mayor Garcia said.

And with Moforte’s help, a core group of businesses around High Street are gathering signatures from more than 250 properties to start the process of forming a Business Improvement District (BID). Once they get at least 60 percent of the property owners to agree, the proposal will be presented to City Council for approval.

BIDs are designated areas where every property owner pays a fee that is collected by the city through property taxes. Those funds then go directly back to the BID, which invests the money in projects like graffiti removal, cultural events, and trash pickup that bring life and foot traffic downtown.

Business owners are hopeful that a BID will maintain the momentum on High Street after TDI assistance concludes next month. On July 1, Moforte will begin his next three-year TDI fellowship, this time working on Holyoke’s Main Street. The new district encompasses the city’s Puerto Rican Cultural District, the second of its kind in the nation.

An assist may soon be coming from the state. In 2024, Gov. Maura Healey signed an economic development bond bill, which included $9.5 million for a downtown vitality program. Gateway City leaders have been waiting for the Healey administration to appropriate the funds after declining to use them in the fiscal year 2026 capital budget. (Healey’s office did not respond to a request for comment.)

“You want to fill empty lots? Help us out. You want to see fewer broken windows and boarded up stores? Help us out,” Feliciano said.

Hurst, who has led the Retailers Association of Massachusetts since 1990, said he sees opportunities on the horizon — it’s only a matter of helping entrepreneurs reach them.

“So many small businesses are owned by baby boomers that are looking to retire. It’s better to buy and take over an established small business than it is to start from scratch,” he said. “There’s opportunities there, but we have to make sure that those risk-takers get some help and a leg up.”

Meanwhile, Rivera is planning a grand reopening that will take place in the next few weeks as renovations at Jenni’s Kitchen near completion.

Despite the challenges along the way, she is proud of the business she’s built and the opportunities it has provided her family. Even though she is still climbing the ladder, she is closer to the American Dream than she ever thought possible.

“I did this while being so limited,” she said. “What I’m capable of is so much more.”