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://www.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://www.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.