Honeycomb, a FINRA-regulated funding portal, has topped the list of platforms with the most Reg CF (Regulation Crowdfunding) filings for the first time (as far as we know).
In recent times, Wefunder and StartEngine have typically been in the running for the most offerings filed with the SEC, but recently Honeycomb has risen to become a top three issuer.
Honeycomb is a bit different than other platforms (funding portals and broker-dealers) active in this sector of online capital formation. Honeycomb is a bank replacement provider allowing for peer-to-peer loans for smaller firms.
As interest rates have increased dramatically and some banks have backed away from shouldering more risk, receiving a bank loan for businesses can be more difficult. On Honeycomb, a borrower can pitch their business to the masses to fund operations. Receiving a loan may be easier on the platform – especially if the businesses has a dedicated following of customers.
Currently, Honeycomb has around 50 live debt offerings on its marketplace. The small businesses are from around the country, like Hangman Brewing Company in Delaware or Hillary’s Chicago Pizza in St. Augustine, FL, or perhaps Square Cafe in Pittsburgh, PA. Interest rates paid to investors range from around 10% to 13%. While a company may raise up to $5 million using Reg CF, most of the loans listed on Honeycomb are far smaller than that.
Honeycomb vets every business raising debt funding on the marketplace – but of course, there are no guarantees for investors. And quantity is not the only metric.
A report from earlier this month foreshadowed Honeycomb’s rise in filings as CCA noted the number of offerings jumped by 137.5% over the previous year.
