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Click to email ChrisBanking and Loan
Issues for Musicians
by Christopher Knab
Fourfront Media & Music
- June 2010

Back to Music Business 101

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.


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