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  • Writer's pictureCalla Norman

How to Generate Passive Income by Investing in Small Businesses

Updated: Aug 22, 2023

Honeycomb investors

Passive income is definitely a buzzword. And why not? As people are reconsidering what it means to “work,” and as fintech makes it easier for consumers to invest in everything from wine to small businesses, passive income is becoming more accessible for anyone, not just those with high net worth.

Read on to find out more about passive income and how you can start generating it with small businesses in your community.*

What is passive income?

Passive income is essentially income you can make while doing minimal or no work. It usually comes from some form of investment, whether it’s by investing in the stock market or some other asset. Investing isn’t the only way you can generate passive income, but it’s the most common.

How can I earn passive income by investing in small businesses?

If you want your passive income strategy to do some good work in your community at the same time, you can consider investing in small businesses on Honeycomb! For as little as $100, you can invest in a small business’s growth plan and earn a return on it.

Getting started is incredibly easy. First, you check out the live campaigns that are currently funding on Honeycomb and see if any are of interest to you. There’s always a great variety of small businesses from across the country and in industries from restaurants to puzzle-making!

If you haven’t already, you can create an investor account and input some basic personal information. Then, you can find a business you want to invest in and invest however much you choose.

When the campaign wraps up, there’ll be a 45-day period in which the business can get to work with the funding you helped them access, after which you can start getting paid! The amortization period for a Honeycomb loan usually is about 3-5 years, but some businesses repay in full much earlier than that. You’ll also receive regular updates on the business’s progress and how they’re using the funding you invested.

Once you’ve received your repayment, you’ve got that passive income! You can spend or save it as you please, or you can reinvest it to continue generating income.

Why should I earn passive income investing in small businesses?

The main reason why investing in small businesses to generate passive income could be a good option for you is because it’s an investment that not only can benefit you but can also benefit your community. If you invest in a small business in your neighborhood, you’ve got a say in what you want to see on your street, and you get to form a deeper connection with the businesses around you.

It goes without saying that another reason to consider investing in small businesses is that you can receive a pretty decent return on investment. Honeycomb campaigns range in interest rates from 5-12%, depending on the level of risk involved with the investment. That’s loads better than the interest you would receive at a bank. So, if you’re comfortable with taking on risk, the return on investment is something to consider.

By putting investing in small businesses as part of your passive income strategy, you’re also investing in something tangible and something that impacts another human being. Your investment says “yes” to an entrepreneur’s dream and allows them to grow their business and support themselves and their families as well as their employees.

What are other examples of passive income?

There are other ways to generate passive income, such as investing in the regular stock market or in real estate. However, investing isn’t the only way to make passive income.

Another example of passive income, for example, could be by blogging with affiliate links, though of course, this requires building up an audience and connections with e-commerce sites.

Earn passive income by actively engaging in your community!

Are you ready to start investing in small businesses and potentially earn some passive income in the process? Create an investor account with Honeycomb Credit and find a small business to say “yes” to today!

*Disclaimer: this is not investment advice and should be used for educational purposes only. Investing is inherently risky, and investors should be prepared to lose some or all of their investment.


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