Honeycomb Credit Review: Invest in Brick & Mortar Businesses

Honeycomb Credit is a small business crowdfunding platform that lets you “put your money where your Main Street is.” The platform mostly features local restaurants, bars, and food trucks and lets you invest with as little as $100. Should you invest?

SustainFi October 26, 2021

Rating: Good (3.9 / 5)


  • Investment Type: debt
  • Minimum Investment: $100
  • Target Return: 5-12%+
  • Maturity: 3 or 5 years
  • Liquidity: none
  • Open to non-accredited investors
  • Investor fees: 2.85% of your investment, up to $37.25


  • You get to support local brick and mortar businesses
  • Low minimum investment
  • Open to non-accredited investors


  • High fees
  • Lending to small businesses is extremely risky
  • Short track record with undisclosed default rates; the platform has not been tested in a recession
  • Honeycomb is not responsible if the business defaults
  • No secondary market

Some of our posts may contain links from our affiliate partners. However, this does not influence our opinions or ratings. Please read our Terms and Conditions for more information.

What is Honeycomb Credit?

Honeycomb Credit is a crowdfunding platform that lets you lend to small businesses in your community and across the country. The platform offers debt investments in vetted companies and markets a 5-12%+ return.

Honeycomb was co-founded by George Cook, a former community banker, and Ken Martin, who is still working for the investment bank RBC, in 2017. According to Crunchbase, the Pittsburgh-based platform raised over $3 million in venture capital.

Since 2017, Honeycomb has helped over 100 businesses run crowdfunding campaigns in 18 states, raising over $3.5 million as of March 2021. According to the company, nearly 60% of businesses on the platform are owned by women or minorities. 55% are in low-to-moderate impact communities.

The average investment on the platform is $1,000, but you can get started with only $100.

How does Honeycomb Credit work?

Honeycomb Credit lets you lend to small businesses. Your investment can take two forms:

  • Promissory notes. With promissory notes, you give money to the business and get quarterly payments of interest and principal (i.e., the amount you invested) until the notes mature in three to five years. Typical annual interest rates are 6-14%. 

  • Revenue share notes. Just like Mainvest, Honeycomb lets you loan money in return for a percentage of revenue generated by the business until you earn a specified multiple of your money, such as 1.5x. So, if you invest $100, you get a percentage of revenue until you get $150 back. Your annual return depends on how long the business takes to pay you $150, making it hard to compare investments. A typical investment multiple on the platform is 1.4x-1.8x. 

Most investments on the platform are secured, meaning that you will have ownership of certain collateral, such as equipment, or a general lien on the business. Many campaigns also include a personal guarantee from the business owner.

The businesses that were raising on the platform in October 2021 were offering to pay interest of 8.25%-12.0%, which is high, but likely reflects the risks of investing in a small business. The loans mature in three or five years.

How does Honeycomb Credit make money?

Honeycomb charges fees to both investors and businesses that list on the platform. Companies pay a posting fee and a success fee, which is a percentage of the total amount raised.

How does Honeycomb Credit select the businesses on its platform?

The businesses listed on the platform are primarily restaurants, bakeries, cafes, food trucks, breweries, and bars, as well as consumer startups like cycling studios and barbershops.

To protect investors from fraud, Honeycomb does due diligence on each potential offering. Honeycomb reviews the financials of each applicant, including operating history, personal credit, market conditions, background checks, and business plan. If the business passes, Honeycomb puts together a term sheet.

In late October 2021, the platform had ten live offerings. The entrepreneurs were trying to raise anywhere from $15,000 to $100,000.

Some of the opportunities included:

  • VTaste Cakes, a vegan bakery in Georgia
  • The Pretzel Haus, a stuffed pretzel restaurant in Florida
  • Prince’s Subs, a sub shop in Ohio
  • Secretos de mis Abuelos, a Puerto Rican restaurant in Pittsburgh
  • Steel House Cycle, a boutique cycling studio in Pittsburgh

How much can I invest?

Offerings on the platform fall under Regulation Crowdfunding (Reg CF), which lets unaccredited investors participate.

If you are not an accredited investor, under Regulation Crowdfunding (Reg CF), you can invest at most $2,200 if your income or net worth is less than $107,000. If your income and net worth are greater than $107,000, you can invest 10% of your net worth and annual income, whichever is greater, up to $107,000.

Accredited investors, who must earn at least $200,000 each year for two years or have a net worth (excluding their primary residence) of at least $1 million, do not have limits.

How do I invest with Honeycomb Credit?

Anyone over 18 can invest. You simply need to sign up, pick a business, and study the materials before investing. Once you invest, you will own a promissory note.

You can also invest through your IRA if you sign up through a service like Rocket Dollar. Honeycomb Credit is one of their partners.

What fees does Honeycomb Credit charge?

Honeycomb Credit charges investors a 2.85% transaction fee, up to $37.25.

In addition, businesses that list on the platform pay a posting fee and a success fee.

Is Honeycomb Credit safe?

Regulation CF requires Honeycomb Credit to perform background checks on the businesses and their management.

However, small business lending is highly risky, and you can lose your entire investment. For example, 80% of restaurants don’t survive past year five. 60% shutter in year one. Don’t invest if you can’t afford to lose your money.

In addition, there is no way for you to sell your investment, so you must hold on to it until it matures in three to five years.

As an alternative investment, the funds you invest are not FDIC or SIPC-insured.

Honeycomb Credit is a new platform that doesn’t yet have a track record. It doesn’t publish any information on the default rates of its past listings, either. It is not Better Business Bureau accredited, although it has good reviews from Trust Pilot.

Honeycomb Credit vs. Mainvest

Mainvest is a local business crowdfunding platform that competes with Honeycomb Credit.

Both platforms offer:

  • A minimum investment starting at just $100
  • Opportunities for non-accredited investors
  • Debt investments
  • Multiple investment opportunities at any given time
  • Clear investment terms

However, Mainvest also offers:

  • No investor fees
  • A Better Business Bureau accreditation
  • Greater transparency (Mainvest approves 5% of the businesses that apply, and 97% of businesses listed on the platform are in good standing)

🔔 Read our review of Mainvest.

🔔 Looking for other ways to invest with impact? Check our guide to investing in communities and small businesses.

Make an impact with your money. Sign up for our newsletter

Read more