CNote’s Flagship Fund – A Path to Community Impact

Impact investing doesn’t have to be difficult or time-consuming. With CNote, you can quickly become an impact investor on the CNote platform and support under-resourced communities with vital capital for small business growth, affordable housing development, climate adaptation, and more; all while earning 4.00% APY*.

The Role of CDFIs

Community Development Financial Institution (CDFI) Loan Funds have been dedicated to this work for decades. Through their efforts, billions of dollars have been leveraged for investment in communities left out of the economic mainstream.

Their primary mission is focused on supporting economic growth in the communities they serve. CDFIs fund small, often BIPOC-owned businesses, affordable housing, volunteer organizations, and services essential to revitalizing low-income neighborhoods. They are critical in ensuring all Americans can share in the prosperity and innovation of our country.

Certified by the U.S. Treasury Department, CDFIs can be found in every state and the District of Columbia, serving both rural and urban communities.

Real-World Impact: ACE and Brown Toy Box

Terri-Nichelle Bradley, founder of Brown Toy Box

What does that impact look like on the ground?

Access to Capital for Entrepreneurs (ACE), a CDFI Loan Fund based in Georgia, has been serving its local community since 1997. Grace Fricks founded ACE with an initial grant of $50,000 to support small business owners across the state. Over the past 22 years, ACE has provided loans and business advisory services to more than 2,000 small business owners across 68 counties in Georgia.

One of those entrepreneurs is Terri-Nichelle Bradley, founder of Brown Toy Box, an educational play-kit company designed to get BIPOC kids excited about STEAM careers. In 2021, Target announced they wanted Brown Toy Box in every one of their stores—40,000 kits in total.

Terri-Nichelle reached out to her network to fundraise but found traditional banks were not yet an option. “We didn’t have enough revenue to qualify for a bank loan,” she said. “One of my mentors who leads a bank told me ‘We won’t look at you for another couple of years.’”

Fortunately, Terri-Nichelle had previously been co-located in an incubator with (ACE).
Terri-Nichelle reached out to ACE, and the CDFI provided the necessary financing to execute the Target deal. ACE funded the first $500,000, which allowed Brown Toy Box to secure the inventory needed to enter 1,757 Target stores. In addition to lending, ACE’s founder and CEO, Grace Fricks, advocated for Terri-Nichelle, bringing other partners to the table to provide additional funding for Brown Toy Box’s inventory rollout across the country.

“The reason that we are where we are right now is because we were able to get the capital,” Terri-Nichelle said. “That happened because some really strong women in the investment and finance sectors really showed up for me.

The Growing Need for Capital

According to a 2023 survey of 453 CDFIs by Fed Communities, there is heightened demand for CDFI products and services and an urgent need for more capital to support their impactful lending efforts.

• “Three out of four CDFIs saw an increase in demand over the past year, and a similar percentage expect demand to continue increasing into next year.”
• “Loan funds frequently cited the increasing cost of lending capital as a challenge, as well as restrictive and insufficient operational funding.”
• “45% of CDFIs reported that lending capital was a significant factor preventing them from fully meeting demand.”

How You Can Help with CNote

• CNote is a women-led impact platform using technology to streamline diversified community investments. Every dollar invested through CNote’s platform funds mission-driven financial institutions that provide responsible and responsive financial products adapted to the needs of under-resourced communities.
• Through CNote’s Flagship Fund offering, we aim to provide any investor with a competitive and scalable way to align their cash with purpose. CNote’s Flagship Fund invests solely in a portfolio of federally certified CDFI loan funds that have decades of experience providing critical lending and financial services to underserved communities across America.

Tangible Impact through CNote

Through the Flagship Fund, you can channel capital to these CDFI loan funds to create tangible impacts in the communities that need it most. In Q3 of 2023 CDFI loan funds used capital from CNote investors to support the following lending activity:

• 80% of loans originated to Black, Indigenous, and People of Color (BIPOC) borrowers
• 73% of loans originated to low to moderate income (LMI) communities
• 77% of loans originated to women-led businesses

Why Use the Flagship Fund?

• Social Impact: Money in the Flagship Fund supports a wide range of community development projects, driving positive social and economic outcomes in underserved areas.
• Transparency and Reporting: CNote provides detailed reporting on the performance and impact of the Flagship Fund, ensuring that users are well-informed about where their money is going and the difference it is making.
• Simplicity: Flagship Fund has no minimums.

Key Features of the Flagship Fund:

• 4.00% APY-* Earn while doing good
• Impact: Your funds support a wide range of CDFIs and community development projects.
• No Barriers to Entry: No account minimum
• Strategic Advantage: Enjoy the security of locked rates for the full 30-month term, combined with the convenience of quarterly liquidity options.
• Diversified CDFI Investment: Carefully vetted and placed among community development organizations

Impact investing can be straightforward and immensely rewarding. By investing through platforms like CNote, you can make a significant difference in under-resourced communities, fostering economic growth and creating opportunities for those who need it most. Become an impact investor today and join the movement towards a more equitable and prosperous future for all.

*Returns are not guaranteed. The Flagship Fund issues Adjustable Rate Promissory Notes that are non-recourse obligations of CNote and involve the risk of loss, including principal. You should carefully review all offering documents including our most current Flagship Fund offering materials, the Subscription Agreement and the Note terms prior to investing. This offering is for accredited investors only. Past performance is not indicative of future results, and future returns may vary. All investing has risks. Before making an investment, the recipient is advised to consult with its financial, legal and/or tax advisor(s) to determine whether an investment such as this is suitable for it. Interest rates are for illustrative purposes, and are subject to change.