--- title: "CNote Review 2026: What Backs the Flagship Fund's 4% Notes, and How You Get Your Money Back" url: https://altstreet.investments/platforms/reviews/cnote kind: platform-review updated: 2026-10-31 description: "CNote review 2026: the Flagship Fund's 4% notes from $1 are backed by unsecured loans to 39 CDFIs with no loss in nine years, issued by a company with a 1.3% disclosed cushion, yearly losses and discretionary early withdrawals." publisher: AltStreet (https://altstreet.investments) license: Public factual pages may be read, quoted and cited with attribution and a link. Bulk redistribution is not permitted. --- # CNote Review 2026: What Backs the Flagship Fund's 4% Notes, and How You Get Your Money Back CNote sells its own 30-month notes from $1 (the Flagship Fund, a Regulation A offering at 4%) and lends the money, unsecured, to 39 community development loan funds. Every annual and semiannual report since lending began in 2017 shows no charge-off, no late loan and no loan on nonaccrual. The notes are general obligations of a company whose disclosed cushion of equity and loss allowance is about 1.3% of its assets and which has lost money every year since 2016. Its lending produces a positive spread overall, because other notes cost less than the 4% Flagship coupon, but not enough to cover its operating costs, and the circular lets it reject or limit the quarterly withdrawals its site describes. AltStreet score: 46.5 (C+), scored October 31, 2026. Method: https://altstreet.investments/platforms | Field | Value | | --- | --- | | Platform | CNote | | What it is | Impact Note Issuer: Regulation A and Regulation D Notes Lent to Community Development Loan Funds, plus an Insured-Deposit Placement Service | | Asset class | Unsecured notes of CNote Group, Inc., backed by unsecured loans to CDFI loan funds | | Website | mycnote.com | | Review first published | October 31, 2026 | | Last updated | October 31, 2026 | | AltStreet relationship | None: no affiliate, sponsorship or partnership | ## The short version CNote is an impact-investing company that borrows from investors and lends to community development financial institutions (CDFIs). Three questions frame the Flagship Fund, the part anyone can buy. What you hold: a 30-month note of CNote Group, Inc. paying 4%, with nothing due until maturity. It is an unsecured general obligation of CNote. Accredited investors' Regulation D notes are different: they are repaid only from the loans they fund, and the two kinds of notes share loan repayments in proportion. What backs it: unsecured, uninsured loans to 39 CDFI loan funds at 1.5% to 4.8%, with no charge-off or late payment in nine years of filings, and behind that a company with $820,122 of equity against $71.1 million of assets at the end of 2025. The company's own risk factor puts its loss allowance and equity at 'only approximately 1.3%' of assets; losses on loans funded by the payment-dependent Regulation D notes pass to those holders, so the cushion matters most for the loans CNote carries on its own account. CNote has lost money every year since it was founded: its lending earns a positive spread, but not enough to cover its costs. How you get out: at maturity. CNote currently offers quarterly withdrawals, but the notes give only a right to request up to 10% of principal on 30 days' notice, which 'The Company may reject or limit ... depending on available funds'. CNote can also repay the notes early whenever it chooses. - **1.3%** CNote's disclosed cushion at December 31, 2025, in its own risk factor: a $106,455 loss allowance and $820,122 of equity against $71,135,165 of assets. The allowance is an accounting estimate, not a separate cash reserve, and it covers only the loans CNote carries on its own account (about $10.6 million); losses on loans funded by payment-dependent Regulation D notes pass to those holders. CNote warns that larger losses could leave it unable to repay noteholders in full. - **$0** Loan charge-offs reported in every annual and semiannual report since CNote began lending in 2017; all loans 'contractually current' at December 31, 2025. In 2025 borrowers repaid $18.6 million of loans and $9.7 million of matured principal and interest was renewed at then-prevailing rates; the company says it 'has yet to endure a major adverse phase in the credit cycle'. - **$850K** CNote's net interest income in 2025, before its loss provision: lending earns a positive spread overall because notes cost about 2.35% on average (accredited and institutional notes pay less than the 4% Flagship coupon) against about 3.5% earned on loans (AltStreet arithmetic). The spread does not cover $3.8 million of operating costs. - **10%** The most a holder can ask to withdraw each quarter, on 30 days' notice, and the company 'may reject or limit such requests depending on available funds'. The site describes current practice as quarterly access of '$20,000 or 10% ..., whichever is greater', under 'management discretion'; that is more than the notes entitle a holder to. - **39** CDFI loan funds borrowing at December 31, 2025, across 519 loans of $42,000 to $2,750,000 at 1.5% to 4.8%. CNote has lent $168 million to 48 borrowers since inception. No filing names the borrowers or gives a largest-borrower share. - **$1.16M** CNote's net loss in 2025, its tenth consecutive loss year; the accumulated deficit was $15.5 million. The first half of 2026 was near break-even (a $106,141 loss, unaudited). Service fees, mainly from Impact Cash, its deposit-placement service, were $1.54 million in 2025: more than net interest income, less than gross interest income. Data note: Company figures are from CNote Group's audited 1-K reports and unaudited 1-SA reports, in dollars as filed. Average loan yield and note cost are AltStreet arithmetic: interest income or expense divided by the average of opening and closing balances. The Regulation A notes outstanding (roughly $6 million to $9 million through early 2026) come from the cover data of the Form 1-A filings; the annual reports do not state them. Site statements are quoted as captured on October 31, 2026. ## Key figures | Figure | What it is | Context | | --- | --- | --- | | 1.3% | Little of CNote's own capital stands behind the general-obligation notes. | CNote's disclosed loss allowance and equity as a share of its assets at December 31, 2025. $106,455 of reserve and $820,122 of equity against $71,135,165 of assets. | | $0 | Loan charge-offs in every 1-K and 1-SA since lending began in 2017. | All loans current at December 31, 2025; $18.6 million repaid and $9.7 million renewed in 2025. | | 10% | The most a holder can request each quarter, which CNote may reject or limit. | Nothing is due until maturity at 30 months; CNote may repay early at any time. | | 0 | Enforcement actions located against CNote, its subsidiary or its officers and directors. | AltStreet tables, IAPD, BrokerCheck, CFPB; state regulators and NMLS not searched. | ## Verdict CNote's loan book has a clean record: every filing for nine years shows the loans current and no loss, no filing reports a missed payment on the notes, and the circular is candid about the risks. What a Flagship investor lends to, though, is CNote itself, a company with equity of about 1% of its assets that has lost money every year because its positive lending spread does not cover its costs, and whose notes give only a right to request early withdrawals. The site describes the notes and their liquidity more favorably than the circular does. **Best for** - Investors who want their savings lent to community lenders, can leave the money for 30 months, and accept the issuer's thin capital. **Look elsewhere if** - You may need the money before maturity. - You want a secured, insured or guaranteed product. - You would rely on the site's description of liquidity rather than the circular's. **Strengths** - No loan charge-off, late payment or nonaccrual in nine years of audited filings, across 39 borrowers. - $1 minimum, no fees and no commissions. - An offering circular that states the 1.3% cushion, the unsecured loans and the untested credit cycle plainly. **Limitations** - Unsecured general obligations of a company with $820,122 of equity and a loss every year since 2016. - Quarterly withdrawals are requests CNote may reject or limit; CNote can call the notes. - The lending spread does not cover operating costs; the company relies on fee revenue, grants and outside equity. - No borrower names or concentration data, and a site that calls the Flagship notes non-recourse and presents current liquidity practice as a minimum. ## Who it fits | Investor | Fit | Why | | --- | --- | --- | | Impact-focused savers who can leave money for 30 months | neutral | | | Investors who need their money back on a schedule | poor-fit | | | Investors comparing it with insured savings | poor-fit | | ## Questions **Is CNote legit?** Yes. CNote Group, Inc. is a Delaware public benefit corporation that sells its notes under SEC Regulation A, files audited annual reports and semiannual reports on EDGAR, and has reported no loan loss in nine years. AltStreet located no enforcement action against the company or its officers. Legitimate is not the same as low-risk: the notes are unsecured obligations of a company with very little equity that has lost money every year. **Is CNote safe?** The notes are not insured or guaranteed. They are unsecured general obligations of CNote, backed by unsecured loans to 39 community development loan funds. No loan has been charged off since 2017, but CNote's disclosed cushion of loss allowance and equity is only about 1.3% of its assets, and it warns that larger losses could leave it unable to repay noteholders in full. CNote's Impact Cash product is FDIC- or NCUA-insured, but it is a separate deposit service with a $1,000,000 minimum for individuals. **Can I withdraw my money from CNote?** The notes run 30 months and nothing is due until maturity. CNote currently offers quarterly withdrawals: you can request up to 10% of your principal on 30 days' notice, and the site describes up to $20,000 or 10%, at management's discretion. The offering circular says 'The Company may reject or limit such requests depending on available funds,' so early withdrawal is a request, not a right. **What does the CNote Flagship Fund pay?** New Flagship notes pay 4% a year, paid with principal at the 30-month maturity. CNote can set new notes anywhere from 1% to 7% by filing a supplement; the rate was 2.0% to 3.0% from 2021 to 2023. There are no fees, and the minimum is $1. **How does CNote make money?** From the spread between what its community lenders pay (1.5% to 4.8%) and what it pays noteholders, from fees on Impact Cash deposits it places for clients (in general up to 1% of deposits), and from grants and consulting. Its lending earns a positive spread but has never covered its costs; CNote has lost money every year and has raised at least $14.68 million of outside equity and convertible capital. ## Evidence appendix Platform website captured October 31, 2026. Every document in all 96 CNote Group EDGAR filings; 52 mycnote.com pages with the circulars, PPMs and impact reports linked there; 29 Wayback captures from 2017 to 2026; registers, enforcement tables and court records. **Highlights** - Circular: 'our loan loss reserve and equity capital represent only approximately 1.3% of our total assets.' - Circular: 'The Company may reject or limit such requests depending on available funds.' - Circular: 'They represent general, unsecured obligations of the Company.' - Company to SEC staff, 2017: 'The Company is obligated to repay the Regulation A investors specified and agreed interest rates, regardless of whether CDFIs repay the amounts loaned to them.' - 1-K for 2025: CNote 'has yet to endure a major adverse phase in the credit cycle.' **Primary source pages** - Offering circular, File 024-12790 (Form 1-A filed July 22, 2026, accession 0001214659-26-008810; qualified August 17, 2026). - Form 1-K for 2025 (accession 0001214659-26-005050) and Form 1-SA for the six months to June 30, 2026 (0001214659-26-011928). - Form 1-K reports for FY2017 to FY2024 and the earlier offering statements 024-10686, 024-11301 and 024-12344 with their supplements. - Company response to SEC staff, March 21, 2017 (0001214659-17-002124), and SEC staff letters of 2017, 2020, 2021 and 2023. - Form D notices for the Regulation D notes, 2016 to 2026, including 0001683145-26-000001, -000002 and -000003 (April 27, 2026). - mycnote.com: Flagship Fund, Solutions, Wisdom Fund, ImpactFlex and Impact Cash pages, Terms of Use, and the September 2025 and July 2024 Flagship posts (captured October 31, 2026). ## Related - Full review (HTML): https://altstreet.investments/platforms/reviews/cnote - Every platform review: https://altstreet.investments/platforms/reviews - Methodology and scoring: https://altstreet.investments/platforms - Category hub: https://altstreet.investments/categories/private-credit --- Source page: https://altstreet.investments/platforms/reviews/cnote Machine index: https://altstreet.investments/llms.txt AltStreet reads what platforms, funds and issuers file with the SEC and what they tell investors, and publishes the difference. Figures are as filed or as captured on the date stated; nothing here is investment advice.