Loyalty Bond Program supports businesses
Last updated 6/3/2020 at 8:38pm
The Urban Redevelopment Authority of Pittsburgh (URA) and Honeycomb Credit are partnering to create the Pittsburgh Loyalty Bonds program, a new way for small businesses within the City of Pittsburgh to smooth out cash flow and engage their customers.
Loyalty Bonds allow small, local businesses to sell gift cards at a discount right now and give prospective customers more reasons to return to that business for years to come. The first 100 Pittsburgh businesses to be accepted into this program will have their setup fees waived and will receive $300 from URA funds when they reach their funding goal.
“The URA continues to explore new ideas to help our small business community bounce back from the devasting effects of the pandemic, and we’re excited to partner with Honeycomb on this creative program,” said URA Executive Director Greg Flisram. “This is an excellent opportunity to not only help our small businesses with immediate cash flow, but for them to gain loyal customers in the long run.”
The Pittsburgh Loyalty Bonds program works like store credit to a small business, enabling customers to earn an extra 30% more than what they invested over the course of two years. Customers are encouraged to come into the stores to shop, eat, or play four times in the future to spend their matured credit.
Honeycomb Credit, a Pittsburgh-based startup, has been providing loans to small businesses via crowdfunding since 2018. Once the shutdown hit though, it put its platform to use behind this new type of gift card.
“Think of them as the war-bond for the COVID era,” said CEO George Cook. It’s essentially a gift card that accrues value over time rather than all at once. So, if I buy $100, I’ll actually get $130 over the course of two years—just like a bond.”
The partnership includes a URA subsidized fee structure for the businesses, meaning there is no capital investment for business owners. The URA and Honeycomb will be working with business district groups to promote this program and encourage businesses to participate.