Key Takeaways
- Honeycomb Credit funds small businesses through debt-based crowdfunding.
- Businesses can raise $25K to over $1 million from investors who earn interest.
- Approval requires a personal credit check to assess financial health.
- Owners must promote their campaigns to attract investors.
- Investors have no control over business decisions.
- Repayments are fixed monthly over 3 to 5 years.
- Honeycomb takes a small cut of the funds raised.
Do you need funding to expand your small business? Or, are you interested in investing small amounts into smaller, local businesses? If so, Honeycomb Credit might be a real treat.
Honeycomb Credit’s offer is a unique offer that enables businesses to grow and investors to earn interest through crowdfunding. Here, I’ll explain exactly what they’re offering, how it might benefit you, and turn you on to some potential alternatives.
This is what’s in store:
- What is Honeycomb Credit?
- How Does Honeycomb Credit Work?
- Do Honeycomb Investors Get a Say in How Your Business Operates?
- Frequently Asked Questions
- Conclusion: Is Honeycomb Credit Legit?
So, let’s rock!
What is Honeycomb Credit?
Honeycomb Credit is a peer-to-peer platform that helps small businesses raise the capital they need to grow. Whether you’re looking to open a new location, upgrade equipment, or expand operations, you may be able to use Honeycomb to secure funding directly from your customers and community.
Instead of relying on traditional bank loans, the platform connects you with everyday investors who believe in your business.
And, according to Honeycomb’s advertising, small businesses that raise funds through Honeycomb Credit often experience significant growth—On average, businesses apparently see a 60% increase in revenue year over year after a successful funding round.
Last year, they offered the Honeycomb Credit Golden Summer Grant, a $5K small business grant through the Skip platform.
To date, the Honeycomb Credit platform has helped over 400 business owners secure more than $30 million in investments, which supports over 1,100 jobs.
You might also like: A Full Skip Review: Business Grants, Funding, and More
Company Overview
Honeycomb Credit Inc. is a Great Lakes-based, privately-held, for-profit corporation that was co-founded in 2017 by George Cook and Ken Martin.
Prior to launching Honeycomb, Cook worked as an economist for the Bureau of Labor Statistics, then held marketing roles at Transunion and ZestFinance.
Meanwhile, Martin has a strong background in finance with experience as an analyst and executive at companies like RBS, Barclays Investment Bank, Uber, and RBC Capital Markets.
As a team, these two are united by the vision to allow anyone to invest in the entrepreneurs and businesses that are most important to them, small ventures.
While Honeycomb is not accredited by the Better Business Bureau (BBB), they still have an A+ rating on the platform with zero complaints—This is rare, especially for a financial offer that’s been around for 8 years.
Their Trustpilot Trustscore is telling too, at 4.5-stars out of 5, based on 92 reviews. Most people seem to be super stoked about the offer, while there are some complaints from investors. The main complaint is about issues with the repayment of their invested funds. To play devil’s advocate, here, small business investment is always risky.
Since I didn’t see 100% satisfaction, I decided to hop over and check out Honeycomb Credit Reddit reviews. Again, the only complaints I found were from investors who didn’t see great returns, not small business owners. And, some investors love Honeycomb for the community involvement.
In a nutshell, Honeycomb Inc. is a legitimate, well-rated company, yet it hasn’t been around for a full ten years, which can be telling that a company is going to last. Still, in the time it’s been in operation, it’s already gained a positive reputation. So, I think it’s definitely worth considering if you might benefit from the offer, especially as a small business.
You might also like: Y Combinator: Fast Track to Success or Waste of Time?
How Does Honeycomb Credit Work?
Honeycomb Credit is essentially a crowdfunding platform that can help you raise capital for your small business from investors in your community. With these steps, you may be able to secure the funding you need.
You might also like: A Full Skip Review: Business Grants, Funding, and More
Step 1: Sign Up for an Account
First, create an account on Honeycomb Credit by entering your email and password or use your Google or Facebook account. Verify your email, then provide basic details like your name, business name, address, phone number, and other necessary information. This sets up your profile so you can start the funding process.
⚠️ I don’t love that a Social Security number is required before the application process starts. To protect your financial info, don’t sign up until you’re sure you’re ready to invest or seek funding.
Step 2: Apply and Get a Credit Analysis
Next, submit an application (via Loanwell’s loan origination technology) with details about your business, financials, and funding goals. Honeycomb Credit will review your financial history, check your creditworthiness, and evaluate your ability to repay the investment. This step usually takes 24 to 48 hours.
Recommended: Here’s How to Check Your Business Credit Score, Step-by-Step
Step 3: Accept Your Funding Terms
Then, if approved, you’ll receive a term sheet outlining your loan details, including the amount you can raise ($25K to over $1 million), interest rates, and repayment terms. You’ll have the chance to review and accept the best terms for your business.
Recommended: No-Doc Business Loans: Get Funds Without Proof of Income
Step 4: Prepare a Winning Investment Campaign
After that, work with a Honeycomb campaign manager to create a compelling pitch for investors. This includes crafting your campaign page, developing a marketing strategy, and producing promotional materials like a video to attract investors.
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Step 5: Launch and Promote Your Campaign
Once your campaign goes live, investors can start contributing, typically with a minimum investment of $100. To maximize funding, engage your community, reach out to customers, and promote your campaign through email and social media.
You might also like: This is How to Build Business Credit Fast [Step-by-Step Guide]
Step 6: Get Funded and Repay Investors
Finally, after you reach your minimum funding goal, Honeycomb will disburse the funds to your business. You’ll then make fixed monthly repayments over a 3 to 5-year term, with a 30-day grace period before payments begin. Honeycomb handles the repayment process, distributing payments to investors automatically.
You might also like: A Deep-Dive National Funding Review: Should You Accept an Offer?
Do Honeycomb Investors Get a Say in How Your Business Operates?
When researching Honeycomb Credit, my main question was whether investors have control over the businesses they fund. This is especially relevant to Business Credit Workshop since we teach small business owners how to secure funding without giving up control or ownership.
The good news is that Honeycomb investors don’t influence business decisions. Unlike venture capital or equity funding, where investors may demand a say, Honeycomb Credit uses a debt-based crowdfunding model. Businesses receive funding as a loan, repay it with interest, and retain full control.
You might also like: This is How to Buy a Franchise With No Money (Sort of)
Frequently Asked Questions
How does Honeycomb Credit make money?
Honeycomb Credit generates revenue by charging a percentage of the funds raised by businesses on its platform. This fee helps cover operational costs, marketing, and support for both business owners and investors.
How do I contact Honeycomb Credit?
You can reach Honeycomb Credit via the form at the bottom of their Business Owners page or email them at hello@honeycombcredit.com.
What is the minimum investment for Honeycomb Credit?
The minimum investment on Honeycomb Credit is typically $100. This allows individuals to support small businesses with a relatively low entry point while diversifying their investments.
Conclusion: Is Honeycomb Credit Legit?
Honeycomb Credit doesn’t guarantee returns for investors—most investments can’t. But for small business owners, it provides a unique, highly rated way to access funding and grow without giving up control.
Compared to a business accelerator, a Honeycomb investment campaign likely requires less time than a pitch, which can be a major advantage. You also maintain full ownership of your operations, something most business owners prefer.
However, you still need to pitch your business and growth strategy to attract investors in your community. Depending on your situation, this could be an exciting opportunity or a time commitment that doesn’t fit your needs.
It’s also important to note that Honeycomb takes a percentage of the funds raised—after all, they need to generate revenue, too.
If you want to secure up to $100K in business credit within 30 days—without pitching to investors or giving up control over your business— join Business Credit Workshop today.