CEO Update: Our Week of Supporting Small Businesses
We’ve all heard it a hundred times by now, but the situation we are living through is truly unprecedented. While no one can predict the full public health or economic costs of COVID-19, we recognize that Honeycomb has a duty to step up to support our family of alumni businesses, our network of local investors, and the broader community of small businesses who are hurting so much right now.
In the past week, our team has stepped up with two major initiatives.
1. Loan Modification Support: First and foremost, we wanted to make sure that our alumni businesses are being taken care of while keeping in mind the interests of their community investors. On Monday, we proposed a modification to all of the conventional business loans for Honeycomb alumni. This modification allows us the flexibility to work with businesses and provide payment relief during a natural disaster, national emergency, or other Act of God. To make such a change, we needed consent from the community investors who lent their hard-earned money to these local businesses. In just 72 hours, more than 60% of investors responded, and 98% of them showed their support for the proposed change in terms. This was a herculean effort to coordinate between hundreds of investors, dozens of alumni businesses, and yes, even a few lawyers. The Honeycomb team and the community of businesses and investors both stepped up in a big way to make this payment relief plan possible. Thank you!
2. New Small Business Relief Loan Option: Secondly, we recognized that many businesses outside of the existing Honeycomb network are also hurting. While numerous government and non-profit organizations are stepping up with proposed programs, we fear that it could be months before the programs are finalized and applications are processed, pushing out much needed small business relief. To address this, we made several operational changes to streamline our due diligence and onboarding processes, and created a simplified suite of products under a Small Business Relief Loan program to help get capital flowing to small businesses as soon as possible. These loans include a 45-day payment-free period and 6 months of interest-only payments, followed by a 3-year amortization period. As with all Honeycomb loans, we never have prepayment penalties, so if and when government resources become available to businesses, they can pay off their loans without any penalty. The response to this program has been overwhelming, and we are already in talks with dozens of businesses to see how we can help. As these relief loan campaigns go live, we’ll look to our community to share the message and consider supporting local businesses.
Looking back on a very long week, I am humbled by the hard work of the Honeycomb team and the support of the community to make both of these initiatives possible. We remain a long way from “normal,” but, despite the uncertainty of the moment, I am inspired by the love and support that community members have shown for one another.
Please stay safe (and sane) during these trying times, and keep an eye out for more updates from Honeycomb Credit.
Co-Founder & CEO