Alternative Funding Sources for Small Businesses in Philadelphia
Small businesses across the country - including Philadelphia - have had immense trouble in finding funding for their growth from traditional sources like banks or private investors. Well, there are alternative funding sources for small businesses to grow and reach their full potential - here’s the story of one such business!
Redcrest Kitchen Bounces Back from Flooding with Community Investment
Redcrest Kitchen, previously known as Redcrest Fried Chicken, is a Philadelphia quick-service staple specializing, of course, in fried chicken. After growing a strong following of customers - especially in the wake of the 2018 Super Bowl win for the Philadelphia Eagles - owners Adam Volk and Chivonn Anderson decided it was time to expand into a full-service restaurant.
They found a space complete with a liquor license and equipment, and were almost ready to open until a water main broke and flooded the restaurant with 30,000 gallons of water. So, they had to start again from scratch and purchase all new equipment for the restaurant. To fund this, they decided to turn to their customers and run an investment campaign with Honeycomb Credit.
Honeycomb Credit allows small businesses to raise money from their greatest resource - their community. Customers, friends, and family can invest in a business like Redcrest Kitchen starting at $100, although the average Honeycomb investment is $1,000. Although Redcrest Kitchen was already well-established in the neighborhood, and probably could have gone to a bank for a loan, they chose to extend the opportunity to their neighbors, who have helped grow the business from the beginning.
Redcrest Kitchen ended up raising $115,811 from 63 investors at a 10.25% interest rate. You may think that’s a bit steep, but when you consider that 100% of that interest goes back to the community, not a faceless bank (or even us for that matter), it makes it a bit more manageable. Plus, Honeycomb campaigns are incredibly valuable for intangible benefits such as a major boost in marketing as well as stronger customer relationships.
Other alternative sources of funding for small businesses in Philadelphia
Small businesses in Philadelphia have other options as well for growing their business without a bank. They could run a crowdfunding campaign with a rewards crowdfunder like Kickstarter, but will probably find they raise less money than they expected. Sadly, another alternative source of funding that many small businesses fall prey to are merchant cash advances, which promise fast money but charge astronomical fees and APRs.
Are you the owner of a Philadelphia small business?
If you’re looking to grow, you might want to consider an alternative source of funding, such as Honeycomb Credit, for you growth project. Fill out the form below to learn more!