The Musician's Favorite Topic: Banking and Loans
1) Choose a reputable bank. Check out their background and reputation in your area.
2) Types of banks and their customer base:
a. The large national bank (B of A etc)
b. The regional bank (are there any anymore?)
c. The local bank...too small for your needs?
3) Are there advantages/disadvantages of dealing with each of the above? Think it out.
4) Do any of these banks give loans to musicians and/or bands?
5) Entities that loan money and their pros and cons:
a. Loan Companies: No pros-stay away from them!
b. Investors-outof reach for most new artists and music is high risk business
c. Rich uncles or Ďsugar-daddiesí-donít take their money. They donít know the biz.
6) Interest. How it is calculated. What to watch out for. Hidden or Late charges?
7) Types of credit:
a. Consumer credit (cards)
b. Secured long term (secured loans vs. unsecured and also guarantors)
c. Secured short term loans( mightwork-what can you put up?)
d. Un-secured loans (forget about it)
e. Secured lines of credit: (good way to go)
f. Unsecured linesof credit: (not unless you have had success galore)
8) How do you get money to "start" your music business if you canít do any of the above?
a. Sell personal items of value
b. Do benefit concerts
c. Save money from live show revenues and/or merchandise sales
9) Still want a Loan? Learn your way around loan application procedures: create a balance sheet and Profit and Loss Statement
10) What happens when you can't pay? You better look into this!
11) Establish good credit. Pay bills on time-overtime-be professional in all your money dealings.
12) Howdo you "fix" bad credit: Donít get into that position to begin with- work with creditors.
13) Maintain a good banking/investor relationship. Keep them posted on how you are doing.
14) Don't be afraid of dealing with bankers or any financial institutions. They can be a musicians best friend.
15) There are no shortcuts to running your business, and your music IS your business, so approach your business and run it with heart and a good cash flow.