February 4th

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As the banking industry has consolidated, banks have less reason to lend with positive externalities in mind.  A large bank in Manhattan sees virtually no positive externalities from a small business in Kensington.  This means that the laws of economics tell us that large regional banks and national banks are less likely to take chances on small businesses than a community bank.  And as community banks have disappeared, so has capital for small businesses.

Why have banks’ small business lending stagnated despite positive economic conditions? Most economists point to the fact that from 1984 to 2017 we lost over 10,000 community banks due to a combination of increased regulation, branch shutdowns, and acquisitions. Consolidation in the banking industry has stunted small business lending leaving many local businesses unable to access capital.

George Cook is the Co-Founder and CEO of Honeycomb Credit, a VC-backed loan crowdfunding website that allows locally owned small businesses to borrow expansion loans from their own loyal customers and fans. Honeycomb unlocks fair growth capital for Main Street businesses, while simultaneously enabling anyone to invest local in their own communities.  George started Honeycomb to counter the adverse effects of community banking consolidation and to provide small businesses an alternative to predatory products that do more harm than good. Prior to founding Honeycomb Credit, George worked at TransUnion and ZestFinance to develop state-of-the-art data analytics tools that help lenders extend credit quickly and fairly.