Skip to main content

New CNote Research Delivers Insights from Entrepreneurs on Improving Access to Capital for Underserved Women of Color


New CNote Research Delivers Insights from Entrepreneurs on Improving Access to Capital for Underserved Women of Color

By reimagining the lending process through an equity lens, lenders can make decisions that yield economic returns and have a significant social impact, says report.

October 20, 2021 // Oakland, CA // CNote, a women-led community investment platform with a mission of closing the wealth gap, today released new research conducted to fix a persistent problem: Women of color start businesses at a faster rate than anyone yet remain underserved by lenders. 

Redesigning Lending: Improving Access to Capital for Women of Color Entrepreneurs reports on research conducted by Impact Experience and funded by the Tarsadia Foundation under the umbrella of CNote’s Wisdom Fund. The fund funnels accredited investor capital into small business loans for women of color and aims to help lenders modernize lending programs using a human-centered design approach. 

The research findings reflect insights from BIPOC women entrepreneurs collected through survey responses from over 75 women, more than 40 hours of individual interviews, and a two-day convening of 20 women. 

Women identify major barriers to capital access

These racially diverse women business owners—66% Black, 28% Latina and 5% Asian or Pacific Islander—identified widespread barriers to capital access, including these key issues:

  • 87.5% of respondents felt that race or gender bias contributed to how they were treated during the lending process.
  • 69% of respondents needed working capital but were not able to find this type of loan product.
  • A majority found the lending process convoluted and labor-intensive, and experienced drastic differences between lenders, significant application processing delays and high denial rates with no explanations. 

The way forward: how lenders can better serve this growing market

The researchers’ in-depth discussions with women about their lending experiences yielded recommendations in four areas for improving the process and enabling women entrepreneurs of color to build their businesses:

  • Offer larger loans and more flexible loan terms, including credit lines for working capital.
  • Revamp credit scoring to more accurately reflect creditworthiness—by considering rent and utility payments, lack of delinquencies and revenue under contract, for example. 
  • Standardize loan applications across lenders to reduce the time and administrative burden of applying.
  • Provide transparency in decision-making as well as post-lending resources, such as financial and leadership coaching, to increase the likelihood of business success. 

“This research highlights lenders’ opportunity to better meet the needs of these potential customers and contribute to thriving communities,” said Danielle Burns, vice president and head of Business Development at CNote. “If we can fund businesses led by women of color with the type of loans they actually need, that will jump-start wealth creation in places where it’s most needed.” 

Research partners center women’s experiences

CNote’s Wisdom Fund is a collaboration with community lenders that includes cataloging and leveraging research findings to improve the lending experience of BIPOC women business owners.

“We invested in the Wisdom Fund because of its community-driven approach to improving access to capital,” said Priya Bery, CEO of Tarsadia Foundation. “This study empowered women of color to tell us how small business lending programs are serving them, and we hope these findings will serve as a blueprint to address barriers to wealth creation that BIPOC women face.” 

Burns observed that the Wisdom Fund is attracting growing interest from corporations and other institutional investors, such as PayPal, that are focused on furthering racial and gender equity. “These investors are looking for measurable impact, and while we are delivering that now, we know that a lending process that better serves BIPOC women from start to finish is essential to closing the wealth gap.”


About CNote

CNote is a women-led social enterprise on a mission to close the wealth gap through financial innovation. Using the power of technology and a community-first framework, CNote’s platform enables corporations, institutions and individuals to efficiently invest and deposit cash at scale in community financial institutions. CNote is a Certified B Corporation that has earned “Best for the World” honors from B Lab and was named “Best Women-Owned Business” by the United Nations’ Women’s Empowerment Principles program.

Media contacts

Thinkshift Communications 

Sarah | (office) 510-898-1837 (mobile) 415-828-3143

Ready to invest with your values?

Get Started