LA Startup HoneyBee Taps Into 'Rainy Day Loans' Market
Michaella Huck is an editorial intern at dot.LA. She's a senior at California State University, Northridge, where she majors in broadcast journalism and minors in Africana studies. Over the course of her college career, she has found a love for student media; she currently works as the editor at the Daily Sundial, a magazine highlighting the issues affecting students.
HoneyBee co-founder and CEO Ennie Lim found herself taking out high-interest payday loans to pay rent after a financially devastating divorce. She eventually had to move back in with her parents in Montreal, Canada and get back on her feet, but the experience inspired her four-year-old fintech startup.
HoneyBee is a short-term credit program that works through employers, offering those that are strapped "rainy day loans." The company also offers credit and financial counseling to get folks back on track. It's part of a growing group of fintech startups that offer loans working through employers, including Salary Finance and TrueConnect.
Among its dozens of users are Alameda County Community Food Bank and skincare line Kate Somerville. Lim said she's also working with several Fortune 500 companies that she hopes to sign on soon.
Lim set her company to work through employers, who pay a fee for the service because it allowed her to provide services to those most in need without charging them. It also provided a perk to employers.
"A big part is employers finally seeing the importance of financial wellness," Lim said. "We're a turnkey solution and we are able to roll out our program within a single day to companies of all sizes. Repayments are debited directly from employees' bank account."
HoneyBee provides no-interest loans of up to $1,000 that can be paid back in biweekly installments. That's aimed at helping the millions of Americans who often work paycheck to paycheck and can be set back by a major expense such as a car breaking down or an unexpected visit to the emergency room.
Those issues ring true with Lim, who came to Canada as an immigrant and struggled with no credit history. It wasn't until after her marriage that she gained one through her husband's line of credit.
Research shows women overall have lower rates of financial literacy compared to men. A 2020 survey on financial literacy conducted by the TIAA Institute and the Global Financial Literacy Excellence Center housed at George Washington University School of Business found that financial literacy is notably lower among women, especially Black women and Latinas compared with their white peers
"I was never taught about personal finances growing up. Everything I learned, I had to teach myself and I think we are all trying to do that," Lim said.
About 86% of HoneyBee users are women of color and 68% have at least one dependent.
"A part of our mission is to offer an equitable and inclusive solution. A lot of DEI leaders are starting to look at this option is because we are essentially reducing the financial literacy gap in the workplace," Lim stated." They are finally starting to realize people come from different socio-economic backgrounds and financial education."
HoneyBee raised $5.7 million in a round led by ff Venture Capital. Lim will use the infusion of funds to grow the team and build up the brand.
"Our number one priority is currently marketing," she said. "We have not done any marketing since our launch. A lot of what we have done has been word of mouth."
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Michaella Huck is an editorial intern at dot.LA. She's a senior at California State University, Northridge, where she majors in broadcast journalism and minors in Africana studies. Over the course of her college career, she has found a love for student media; she currently works as the editor at the Daily Sundial, a magazine highlighting the issues affecting students.
