Honeycomb Credit has announced a new financial product for SMEs called “Loyalty Bonds.” This new product is less a bond and more of a gift card as the offering enables small businesses to quickly raise cash today with the purchaser receiving a gift card worth 1.3X the amount of the cash purchase. Purchasers will receive their gift cards in four equal installments every six months over the course of two years.
By creating a centralized market for these gift card bonds, customers can infuse cash into their favorite business now, and treat themselves to the rewards beginning in six months, according to Honeycomb.
The minimum amount for a Loyalty Bond is $3000 with no maximum. The only requirements are at least 1 year of operating history, a strong social media and/or email following, and a physical or online shop that accepts gift cards. Honeycomb states that there is no credit check or financial review.
As of today, Honeycomb already has three businesses pitching this product. Loyalty Bond campaigns are now live for three businesses: Simply Elegant Catering in Cleveland OH, Status Grooming Excellence in Pittsburgh PA, and Pawcasso in Long Island NY.
Honeycomb CEO George Cook explained his thesis:
“Purchasing gift cards can be a great way to support small businesses right now, but unfortunately as businesses reopen if all of their customers come back shopping with gift cards, businesses risk a cash flow catastrophe. The Loyalty Bond program solves for this problem while ensuring that customers will keep coming back for years to come. Businesses win with money to help them weather the storm, and contributors win with a great bargain at their favorite small businesses.”
Honeycomb currently operates in Pennsylvania, New York, Maryland, Michigan, and Ohio. Honeycomb is a FINRA regulated funding portal.