Honeycomb Credit

Honeycomb Credit is a community-based funding platform that connects small businesses with fair loans from their customers and community members, revitalizing small businesses and towns across America. Honeycomb Credit has facilitated $40 million in community investment across 500 small businesses in 40 states and Washington, D.C.

The Problem
Small business is the backbone of the American economy. Nearly half of the entire American workforce, and 43.5% of America’s GDP, is attributed to small business. However, since the Great Recession, the U.S. banking industry has consolidated significantly, reducing small businesses’ access to capital. In 2007, over 7,000 banks were available for capital; now, it’s around 4,000, and SBA 7(a) loan originations have dropped by 47%. This has made it harder — especially for women- and minority-owned businesses — to secure traditional financing. The Federal Reserve reports that 53% of small businesses can’t access the capital they need.

Tech-enabled lenders like Square Capital and Kabbage offer quick credit decisions but at high average APRs of 94%. Additionally, while CDFI lending has been valuable, it only accounts for 2% of business lending and is challenging to scale.

The Solution
Honeycomb Credit is an innovative community-driven lending platform that facilitates crowdfunded small business loans that democratize lending in a fast, responsive, fair, and de-risked way. Through Honeycomb’s online application and underwriting process, applicants can get access to favorable and non-predatory loan terms in as little as 24 hours. Once businesses are approved for a loan campaign, Honeycomb works with those businesses to develop a marketing campaign and build community on social media, getting local investors committed to their success.

By transforming lending into a public community process, Honeycomb fosters meaningful connections between investors and businesses. This encourages consumers to support these businesses intentionally, influencing purchasing behavior and even prompting large foundations to source products from their portfolio investments.

At the same time, this “social proof” serves as a powerful community underwriting mechanism. Small businesses with strong community support tend to fund at a higher rate and have a lower default rate than those with less activity. The results speak for themselves: small businesses that successfully fund on the Honeycomb platform, on average, experience 60% revenue growth in the year following their offering.