Individual investors can make a big impact through the Impact Note, an offering people and institutions alike can invest in to finance the work of Enterprise Community Loan Fund, Enterprise’s community development financial institution (CDFI). These fixed-income securities offer a unique ability to support community development projects at an accessible investment minimum—and we’re seeing increased interest from individual investors, said Anna Smukowski, senior director of Enterprise Community Loan Fund.
“By opening the door at $5,000 and reducing barriers to investing, our Impact Note is helping more and more people advance racial justice, promote climate action, and make housing more affordable in their communities and across the country,” Smukowski said. “Individual investors now make up nearly half of our investor base. That’s the power of democratizing impact investing.”
The Impact Note’s growing popularity has helped it reach an impressive new milestone: $100 million raised since its relaunch in 2018. That money has helped finance the cumulative impact of Enterprise’s CDFI, including the creation or preservation of 145,000 affordable homes and 6.8 million square feet of community and commercial space.
We recently spoke with Smukowski about Enterprise’s recent milestone, what the Impact Note can do for communities, and how to get a start in impact investing.
Why is making impact investing more accessible important to you?
Helping people invest in projects that serve their communities is part of our DNA as a community-based lender. We're trying to create opportunities—not just through our investments, but through how we raise capital, so that individuals are supporting the resources they want in neighborhoods across the country.
How is your team addressing barriers that retail investors might face?
Investing in real estate and other community-based projects can sometimes require pretty high minimums, making it less accessible for individuals to invest in. That’s why we reduced our minimum from $25,000 to $5,000 in 2023. Another challenge is knowing which opportunities exist. We’ve been trying to address that through our series of white papers by creating more transparency around which products exist in different markets for different types of investors—there’s a pretty broad spectrum.
We’re also launching a new investor portal that will make it easier for prospective investors to get started. I think things like that will help simplify the process.
Tell us more about the new investor portal.
It’s a new platform that helps take a prospective investor through the Impact Note subscription process and access our Prospectus in a smooth and quick way. Investors will also be able to log in and track their Impact Notes.
The Impact Note recently hit a big milestone: $100 million raised since relaunching the program in 2018. What do you think this says about the capital product?
The team is really excited. This milestone shows that investors want a balance between economic returns from their investments and positive social and environmental impact.
We’ve been able to raise below-market capital in a high-rate environment, and we’re able to pass those rate savings on to our borrowers. In a volatile market environment, especially over the last couple of years, when inflation and other supply chain disruptions have greatly impacted the cost of affordable housing, our lower-cost capital really helps support our borrowers and their projects.
Are there any projects that stand out to you?
We’ve supported so many projects that demonstrate how the Impact Note can be truly catalytic in areas that need them, like 48th and Race in the Denver area, a project that unites homes, culturally competent medical services, and healthy food options all under one roof. Specifically, this project combines affordable housing with a federally qualified health center with a grocery store in a community that has been a food desert since urban renewal in the 1960s. We've financed multiple phases of that project. It’s just a great example of what can happen when all this capital comes together.
What’s next for Enterprise Community Loan Fund and the Impact Note?
We recently launched the Equitable Decarbonization Initiative, which supports projects committed to reducing carbon emissions through electrification, energy efficiency, and other climate risk and adaptation measures. We designed it to help augment other financing we're providing through efforts like Power Forward Communities, an Enterprise co-lead coalition with federal grant funding from the Greenhouse Gas Reduction Fund. We’ll be able to provide more flexible financing to partners that are really leading the charge when it comes to decarbonizing affordable housing. That’s a theme we're excited to explore and support through the Impact Note.
You're an impact investor yourself. What would you say to people who want to invest in their communities but don’t know where to start?
Fixed income note offerings like the Impact Note can be an accessible starting point because they can have relatively low minimums. You can put money in for a certain term, get a fixed interest rate, and know that when it comes to maturity, you’re able to decide whether you want to renew or redeem your funds.*
At the same time, you can take an active role in building an equitable and sustainable future, starting with community-serving projects.
Disclaimer: This is not an offer to sell or a solicitation of an offer to buy any securities. Such an offer is made only by means of a current Prospectus (including any applicable Pricing Supplement) for each of the respective notes. Such offers may be directed only to investors in jurisdictions in which the notes are eligible for sale. Investors are urged to review the current Prospectus before making any investment decision. The securities are unsecured debt securities subject to terms, conditions and risks described in the Prospectus, including the possible loss of the amount invested. Payment is dependent on Enterprise Community Loan Fund’s financial condition at the time payment is due. No state or federal securities regulators have passed on or endorsed the merits of the offering of notes. Any representation to the contrary is unlawful. The notes will not be insured or guaranteed by the FDIC, SIPC, or other governmental agencies.
*Past performance is no guarantee of future results
The Impact Note is currently not offered in Arkansas, Florida, Kentucky, Nebraska, and Tennessee.
