New Impact Fund Serves Women Entrepreneurs
The Wisdom Fund, created by CNote and mission-driven lender CDC Small Business Finance, gives foundations, family offices and other accredited investors that focus on women a new way to serve their mission. Developed with the participation of four nonprofit lenders, the Wisdom Fund funnels investor dollars into CDFIs to fund critical loans to low- to moderate-income women and women of color.
The lending imbalance is eye-opening: Women get $1 of every $23 small business loan dollars, even though they are the fastest-growing group of entrepreneurs in the U.S. Women business owners of color are multiplying even faster, but face higher barriers.
Every dollar invested in the Wisdom Fund is deployed in affordably priced loans for women-owned small businesses. The owners also receive free business advising. During the launch phase, the Wisdom Fund partners will collect and share data on what works and doesn’t work for these borrowers, and use these findings as they scale up accessible financing for women entrepreneurs.
There’s been a wave of attention to the gender gap in venture capital, but far more women are affected by the small business lending imbalance: There are about 12.2 million women-owned small businesses in the U.S., compared with an estimated 200,000 VC-fundable firms—total.
Investors in the Wisdom Fund earn an estimated 4 percent annual return, over a 60-month term, on a loan portfolio that’s diversified across established CDFIs. Find out more about the Wisdom Fund here.