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Start-up of the Week: With its motto of ‘Invest in Equality’, CNote revolutionises the FinTech game

CNote’s loan funds provide the customers with access to flexible tranched capital, thus enabling these individuals to avoid paying interest on idle funds

In today’s episode of International Finance’s start-up exploration, we will talk about a FinTech start-up called CNote, which firmly believes in the theory of financial products and services catering for the needs of customers panning across all the social strata.

CNote is known for rewarding money savers with financial plans that help these individuals to earn passive income. CNote users make as much as 2.5% profit on their annual earnings. The start-up has been certified by the United States Treasury and uses the US Treasury-certified financial institution called Community Development Financial Institution (CDFI).

The money savers can enjoy a low-risk, high-yield return through inclusive economic investments provided by CNote. The Oakland-based start-up raised USD 7.25 million in Series A funding in September 2022.

Knowing CNote In Detail

Being impactful, inclusive, and a proven and scalable FinTech platform are the business principles of CNote, whose impactful deposit programs create jobs, fund BIPOC-owned small businesses and support affordable housing development. The venture is a women-led certified B-Corporation that reportedly uses technology to foster greater economic and racial justice through investment.

CNote has also partnered with federally-certified community lenders that have decades of experience investing locally. The start-up’s technology is known for “empowering institutions to align their deposits and investments with the causes that matter to them.”

CNote, co-founded by Catherine Berman and Yuliya Tarasava, has created and maintained over 4000 jobs since its inception, apart from investing more than 50% of capital into BIPOC-led small businesses. Over 40% of the capital was invested into women-led small businesses, more than eight times the national average.

Services Provided By CNote

The venture’s most notable service is ‘Cash Management’, with a social impact that aims to fulfil CNote’s community investment goals on racial justice, gender equity, and climate justice fronts.

“CNote makes it seamless to deploy a thoughtful community investment program and generate impact simply by moving a portion of your organization’s cash into CNote’s Impact Cash solution. Funds are insured and backed by the full faith and credit of the US Government through FDIC and NCUA insurance programs. CNote’s been in business for over six years and has deployed millions of dollars into communities across America–with zero losses,” the venture stated.

The start-up’s corporate-ready investment and depository solutions help organizations scale their impact easily while maintaining robust risk and cost controls, and building investment programs that support these businesses’ mission, environmental, social, governance, diversity, equity, and inclusion goals.

CNote has also become a flexible capital source for CDFI loan funds in the United States through its ‘Capital Intermediary Program’, which streamlines processes like an investment into Community Development Financial Institutions Fund (CDFI loan funds) and placement of cash at CDFI banks and low-income designed credit unions.

CNote’s loan funds provide the customers with access to flexible tranched capital, thus enabling these individuals to avoid paying interest on idle funds. Talking about loan funds, CNote also provides these customers access to both individual and institutional investors, apart from producing content for its CDFI partners, along with coordinating with these clients on media campaigns and thought leadership opportunities.

CNote provides its clients with financial engagement opportunities, including finding new deposit sources, exploring better visibility and partnership possibilities, having unified account management to reduce administrative burden and having an impact reporting mechanism from the FinTech start-up.

Knowing A Bit More About CNote’s ‘Impact Cash’

Impact Cash connects corporations and other impact investors to CNote’s client businesses that work deep in their communities to effect positive change for their members and customers. CNote capital comes at no cost for its community partners, with features such as building direct connections to a network of new impact investor capital through a single touch point, having investors deeply committed to economic justice and community development and willing to offer lower interest rates at longer commitments, getting marketing support for increased client/membership opportunities and a zero-fee program that prioritizes long-term community impact.

Explaining CNote’s Flagship & Wisdom Funds

“Flagship Fund is an alternative to other short-term investment options. 100% of your dollars are directed to community development organizations that fund loans for small businesses, help build affordable housing and bring sustainable economic growth to communities across America,” said CNote.

Under this investment plan, 100% of the investors’ money gets invested with non-profit lenders that finance under-served communities and spur local economic development across the United States. CNote also offers flexible liquidity to provide these investors with access to their dollars as per their situational needs.

“Flagship Fund invests solely in federally-certified community development financial institutions (CDFIs) that have decades of experience providing critical lending and financial services to under-served communities across America. CDFIs are critical sources of capital, helping to fund small businesses, affordable housing, and other community development initiatives,” CNote said.

The Wisdom Fund enables individuals and institutions to invest in the future of women of colour.

Money invested in the Wisdom Fund gets deployed by CDFI partners as affordably-priced loan capital targeting women small business owners, specific women of colour, who also receive free business coaching.

The investors also earn a 1% annual return, along with a 60-month investment term and a minimum return of USD 100,000. Wisdom Fund invests capital across multiple community lenders who hold a loan portfolio covering diverse geographies.

The Road Ahead

CNote places investor funds into deposit and loan products through a network of over 2,000 impact-driven community financial institutions that serve low-to-moderate-income communities, apart from supporting women and people of colour entrepreneurs, fund affordable housing and provide economic inclusion in general.

As per the latest reports, CNote is deploying about USD 300 million in cash and fixed-income investments via its platform. The platform currently has 1,900 corporate, foundation and individual investors, including AMD, Patagonia and Xylem, as well as Apple, Mastercard, Netflix and PayPal.

Image Credits: CNote

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