Across the United States, BIPOC (Black, Indigenous, and People of Color) entrepreneurs are building businesses that strengthen communities, create jobs, and contribute to the economy. These business owners share the same dreams as any entrepreneur: to grow their businesses, serve their customers, and build something lasting. But the path to success can look very different for them. They encounter barriers—often systemic that make securing the funding needed for growth a constant challenge.

Facing Funding Challenges

When BIPOC business owners seek funding, they often face more obstacles than their white counterparts. A 2018 Federal Reserve study found that 53% of Black-owned businesses did not receive the full amount of business funding requested compared to 24% of white-owned businesses. (source: Federal Reserve). For many BIPOC entrepreneurs, this gap represents more than a financial setback—it limits the capacity to hire employees, invest in necessary equipment, or expand to new locations. These financial roadblocks can restrict growth and, at times, put the very future of the business at risk.

The Revenue Gap: Doing More with Less

Even with hard work and strategic planning, BIPOC-owned businesses often operate with slimmer profit margins. For example, a Brooking Institution study reported that Black-owned businesses earn an average annual revenue of $1,031,021, while non-Black businesses bring in $6,485,334 on average (source: Brooking Edu). Similar patterns appear for Hispanic-owned businesses, which also see lower-than-average revenues. These disparities translate to limited financial resilience, meaning that many BIPOC entrepreneurs have less room to maneuver when faced with economic disruptions or unexpected expenses.

The COVID-19 Impact: Amplifying Financial Pressures

The COVID-19 pandemic presented an unprecedented test for small businesses, with BIPOC-owned businesses bearing a disproportionate share of the burden. A National Bureau of Economic Research report found that between February and April 2020, Black-owned businesses saw a 41% decrease, compared to a 17% decrease for non-black-owned businesses (source: National Bureau of Economic Research). Hispanic and Asian-owned businesses also faced declines of 32% and 26%, respectively, as industries like retail and food service—where many BIPOC entrepreneurs operate—were hit hardest by pandemic-related closures and restrictions.

Bridging the Gap with the Wisdom Fund*

To address these disparities and support BIPOC entrepreneurs, especially women of color, CNote created the Wisdom Fund*. This unique investment initiative partners with mission-driven financial institutions across the country to support providing access to capital for BIPOC women entrepreneurs. Since its launch, the Wisdom Fund* has supported funding for nearly 300 loans to BIPOC women entrepreneurs, totalling over $21 million. Through this support, the Wisdom Fund* is helping to bridge the funding gap, allowing BIPOC women to not only build businesses but also strengthen their communities, create jobs, and pave the way for future generations of diverse entrepreneurs.

OurPlace Residential Services: A Story of Impact

The entrepreneurial nurses behind OurPlace Residential Services envisioned creating a supportive housing space in Minneapolis, a concept that hadn’t been realized in the area before. Despite thorough planning, one barrier loomed: securing the capital needed to purchase and renovate an apartment building. Multiple banks turned them away due to a lack of collateral, but one bank finally referred them to Meda, recognizing it as a project Meda would be eager to support. 

True to its mission, Meda, a CDFI committed to empowering BIPOC entrepreneurs and revitalizing neighborhoods that is supported by CNote’s Wisdom Fund*, backed the project from the start. Meda tapped into its network to locate a suitable property, secured funding for the $2.5 million acquisition and renovation, and connected with partners like the City of Minneapolis to ensure the venture’s success. Thanks to Meda, OurPlace has welcomed its first clients, expanding to 15 staff and building a model that could help combat housing instability and homelessness across the Twin Cities. As co-founder Murwo shared, “We couldn’t have done it without Meda…they made this happen.” 

Read OurPlace’s full story here: https://wpstaging.mycnote.com/blog/meda/ 

Supporting BIPOC-owned businesses is more than an economic imperative; it’s a commitment to building a fairer, more resilient economy. Programs like CNote’s Wisdom Fund*, along with the essential work of mission-driven financial institutions, are crucial in bridging the funding gap and empowering entrepreneurs who have historically been overlooked. By expanding access to capital for BIPOC entrepreneurs, we enable them to strengthen their communities, create jobs, and contribute to a more inclusive future. 

Learn more about CNote’s Wisdom Fund here: https://wpstaging.mycnote.com/solutions/wisdom-fund/ 

*Available to accredited investors only. Returns are not guaranteed. CNote Group, Inc. (“CNote”) is not a bank, a credit union, or any other type of financial institution. CNote is not a registered investment advisor with the Securities and Exchange Commission (SEC) or a broker-dealer authorized by the Financial Industry Regulatory Authority (FINRA). CNote is not a legal, financial, accounting or tax advisor. CNote offers unregistered securities consisting of various promissory notes (“Notes”) to eligible investors pursuant to Regulation A and Regulation D under the Securities Act of 1933, as amended. For more information on risks related to investing in our Wisdom Fund Notes see our  Wisdom Fund Private Placement Memorandum. Neither the SEC nor any state securities regulator has passed upon or endorsed the merits of any investment in CNote’s offerings. Investments in our Notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), or any other governmental agency. Investing in our Notes involves risk of loss, including the principal invested. We encourage you to consult with a financial adviser or investment professional to determine whether or not the CNote platform makes sense for you. Information provided herein is for educational purposes only and is not tailored for any individual investor or client. It should not be relied upon as financial or investment advice. Any projected returns are illustrative, based on interest rates offered currently or in the past, which may be subject to change, and may not reflect the ultimate rate of return for any particular investor or client. Past performance is no guarantee of future results, and future returns may vary.

When it comes to our shared climate reality, Hope Credit Union’s members are familiar with the ever-expanding narrative. After all, they’re living it. Across the Deep South, summers are getting hotter, power outages are becoming more common, and electric vehicles (EV) are being plugged into more and more homes. Members, however, aren’t just experiencing these shifting dynamics—they’re talking about them.

According to Tyler Archie, the Vice President of Strategic Initiatives and resident subject matter expert on environmental impact for Hope Enterprise Corporation, he and his team are all ears. In fact, explicit member feedback spurred Hope Enterprise Corporation and Hope Credit Union (collectively “HOPE”) to point financial products and community economic development programs towards greenhouse gas reducing technologies and projects. “In focus groups community members tell us how we can help improve their lives and communities,” he said. “They tell us that they are excited about technologies like hybrid cars, EVs and heat pumps; they want to breathe cleaner air; and they also say that they are interested in doing their part to slow climate change. It’s our job to make sure that those financial health and wealth-building opportunities are available and affordable to them.” 

That’s exactly what Hope Credit Union has been doing. Since 1994, Hope Credit Union has provided financial services, leveraged resources, and engaged in advocacy that strengthens the financial health and wealth of people in under-resourced communities in Alabama, Arkansas, Louisiana, Mississippi, and Tennessee. For the past 30 years, the credit union has strived to find new ways to address the intergenerational wealth gaps that exist throughout its footprint, whether that’s been through lending for affordable housing, community facilities, or community partnerships. 

More recently, the way that HOPE is approaching building generational wealth is through green lending opportunities, including residential and commercial solar financing. For example, on April 22nd, 2024, Hope Enterprise Corporation (HEC), which is part of the broader HOPE family of community development organizations, was selected as one of 60 applicants to participate in the United States Environmental Protection Agency’s (EPA) Solar for All program. The EPA awarded HEC a state-level award for $93,670,000 in Arkansas and $62,450,000 in Mississippi. According to the EPA, the $7 billion program will create new or expand existing low-income solar programs, which will enable more than 900,000 households in low-income and disadvantaged communities to benefit from distributed solar energy. More specifically, these programs will further the Greenhouse Gas Reduction Fund’s objectives by reducing greenhouse gas emissions while lowering electric bills for overburdened households in 25 states and territories that have never had statewide low-income solar programs before.

That includes Arkansas and Mississippi, where HEC was selected to deploy state-level, Solar for All awards. HEC’s Solar for All proposal included financing models for solar and battery storage on single-family homes and multi-family affordable housing, as well as community solar.  

All three pathways are designed to achieve monthly utility bill savings of at least 20% for low-income households, while at the same time supporting a job market for solar installers. One goal of the multifamily approach is to lower energy costs for low-income tenants as a way to help those families eventually make the transition from renting to home ownership.

According to Tyler, although the price of power in HOPE’s Deep South footprint is relatively cheap compared to other regions in the United States, the energy burden—or the percentage of a household’s income spent on energy—is among the highest in the country. That leaves families with less savings and vulnerable to unexpected expenses. Solar for All can create an opportunity to put utility bill savings in the bank. “Through Solar for All, we can create $400 in savings that most families are missing to help insulate them from unexpected life events,” Tyler said. “If we can help people achieve financial health, you’ve got the foundation to move into wealth-building opportunities.”

The Opportunity of Climate Change

All of HOPE’s green lending strategies hinge upon innovative financing, strategic partnerships, and its experience and expertise in serving disadvantaged communities. That’s one of the reasons why the credit union became a CNote Climate Cash™ partner. Climate Cash™ is a deposit solution enabling corporations to enjoy FDIC or NCUA insurance and competitive returns while contributing to carbon-reduction lending activities. Climate Cash™ enables corporations to deploy cash in the form of deposits into a network of mission-driven banks and credit unions like Hope Credit Union to combat climate change. Importantly, participating corporations can monitor, administer, and track reporting of their Climate Cash™ deposits through a single interface. 

HOPE plans to expand its climate lending beyond solar. The credit union is currently working on creating a home energy efficiency lending opportunity, and it’s preparing to pilot an EV-lending program. According to Tyler, the future value of EVs goes beyond transportation. That’s because EVs, as he puts it, are “massive batteries rolling around on wheels.” By bringing EVs into the affordability conversation for its members, Hope Credit Union members will have the ability to bolster resiliency efforts in a part of the country that’s already experiencing power outages associated with stronger and more unpredictable weather patterns.

Tyler views the transition to sustainable energy as both a crisis and as the wealth-building opportunity of a generation. For him, it again goes back to what HOPE members are already saying: EVs are more fun to drive, heat pumps are nice to have, and the future can be better. Tyler compares the potential of consumer finance to unlock consumer demand to that of General Motors’ first automobiles and Apple’s iPhone. “Financing is the thing that can really unlock consumer behavior,” he said, “and the American consumer can dramatically accelerate climate change mitigation efforts if the financing is done right. I think that’s what we’ll see: market demand and people’s interest in enjoying both a higher quality of life and financial savings that result in adoption of sustainable technologies and a path for financial health and wealth in our low-income communities.”

Learn More:

• Climate Cash™ is enabling corporations to enjoy FDIC or NCUA insurance and competitive returns while supporting carbon-reduction lending activities.
• Hope Credit Union, a certified Community Development Financial Institution (CDFI), is dedicated to enhancing financial stability and fostering economic growth for individuals and families in underserved communities across the Deep South. Since 1994, Hope has provided vital financial services, leveraged resources, and engaged in advocacy to strengthen the financial health and wealth of people in under-resourced areas.