GadCapital: Top Entertainment Business Loan Options
Obtaining an Entertainment Loan
Getting suitable entertainment business loans may help creatives and entrepreneurs bring their ideas off the ground and share their work with their community.
For many artists and performers, negotiating the business world is complex, confusing, and tedious. To develop a short film, a play, an album, a comic book series, or any other project that involves equipment, supplies, or a cast and crew, financing is required in certain situations.
Because individual artists and company owners commonly seek entertainment business loans to support business ideas, they may not be the typical lump-sum bank funding. Here are a few creative financing possibilities for innovative companies.
How Entertainment Business Loans Work
If you need entertainment company loans, you may attempt debt financing, which is the exchange of money for the promise to return it, plus interest, over a certain period. But before they can trust you to keep your part of the contract, they require proof of your financial soundness. Typical evidence includes industry expertise, a solid credit score, substantial yearly sales, and a suitable DSCR.
However, many artists and creators seeking funding for their projects lack the credentials required to acquire debt finance from conventional lenders or internet platforms. However, there are a few options available to entertainment company owners, mainly because they don’t follow the typical business finance road (but what fun is that?).
However, many entertainment company owners, individual artists, or production firms get money without debt. You may seek investors who would put up money in exchange for stock in your company or project or ask people to give tiny sums of money.
Top 6 Entertainment Business Loan Options
Keeping that in mind, here are some of the top possibilities for entertainment company loans:
The safest way to raise funds for most artists and makers is via a crowdsourcing site like Kickstarter or Indiegogo. According to the platform and the nature of your project, you may give your donors an early copy or demo, merchandise, a ticket to the premier, a commissioned artwork, or a cameo in your film. Rewards often rise in value (and function) when your supporter commits more money.
Crowdfunding has several benefits. If you follow your platform’s criteria, you’re qualified for this kind of funding. Aside from getting funds for your project, crowdfunding is a great way to build a community of fans and supporters. You may also utilize crowdfunders to test your concept.
Due to this, it is recommended that you utilize crowdsourcing in conjunction with a more effective strategy, such as one of the types we will discuss next. Also, most crowdfunding sites charge a fee for their services, so a portion of the money you raise won’t honestly go to you.
Several kinds of zero-debt financing entail money being exchanged for power over your organization, such as angel investment, another common form of entertainment business loan.
Angel investors risk their money to assist early-stage firms and initiatives’ success. Instead, they generally accept shares in the company. Depending on the investor’s involvement in your project, they may expect to play a crucial decision-making role or give assistance and experience.
Finding angel investors frequently requires leveraging personal and professional networks. If you have a small network or need to brush up on your in-person networking skills, online platforms like AngelList and Angel Investment Network can help you connect with investors.
Be prepared to justify your project’s value, whether you locate your angel investor personally or online. Create a presentation or paper outlining your unique value proposition (or, in the case of creative initiatives, how your project stands out from the competition), your funding needs, your marketing strategy, and your financial predictions. Preparation increases the likelihood of possible angels believing in your financial accountability and the importance of your creative project—and offering money and guidance—to help you get started.
Hometown Loans (Friends and Family)
As an artist, you know how important it is to surround yourself with supporters of your work; and at some time in your career, you may need to access that network for emotional and financial assistance. But contact your friends and relatives for a loan with extreme caution. Prepare a comprehensive loan agreement or promissory note, so they understand your legal obligation to return their donation. Consult an attorney if necessary.
Kiva loans are a mix of crowdsourcing and alternative financing. This 501(c)(3) non-profit internet lending company provides 0% interest loans up to $10,000 with payback durations of three to 36 months. People may explore Kiva and donate to organizations like crowdfunding portals. A repayment plan is agreed upon between Kiva and the company owner.
Women, refugees, IDPs, and business owners in developing countries and crisis zones are among those who may apply for a Kiva loan. A Kiva loan may be appropriate for you even if you are not a company owner who is socially or ecologically concerned—interested in learning more about the sorts of creative enterprises Kiva has authorized for these outstanding loans?
Business Personal Loan
If you require a large quantity of money for your entertainment company or project, you should turn to a bank or an internet lending platform. As you now know, very few of these lenders are ready to risk lending to fledgling enterprises.
If your credit and finances are solid, you may be able to get a personal loan from a bank or an internet lender. Like a personal loan, a business loan isn’t restricted to business objectives. Your lender’s payback time is the only way to make sure you can adequately repay your loan and interest. Your employment is vital, but it isn’t worth getting stuck in a debt cycle. If your looking an instant financing, you can get up to $500 from GADCapital.
Business Credit Card
If your company doesn’t have its financial history of presenting, the card issuer might just examine your personal financial information instead.
Your credit card won’t provide you with enough funds for your entertainment business, especially if you’re working on large-scale projects like filming or recording an album. And even if you did have access to an extensive credit line, your credit card’s short billing cycle would likely not allow you to repay it without incurring additional interest. Instead, use your company credit card to pay for day-to-day costs like cheap gear, art materials, or even meals for your cast or crew (even if you’re the only one credited). If you qualify, use a cashback or points card to earn rewards every time you spend.
Borrowing for the Entertainment Industry
This tutorial only highlights a handful of the most popular and accessible ways of acquiring money for creative endeavors. Consider applying for grants, paid residencies, or scholarships, which may offer you full or partial cash and the time, materials, tools, and space you need to complete your project.
Also, keep in mind that several of these financing options may be combined. For example, a company credit card is a must-have for every serious business owner, regardless of the sector (and earn perks and rewards).
Managing your entertainment company’s finances is undoubtedly a project in and of itself—but maybe not as creative as you’d want. Start with what and who you know if you’re intimidated. Ask your colleagues artists how they’ve funded projects in the past. Create a Kickstarter or Indiegogo page and watch how it goes. If it makes sense for your project, apply for a business credit card online and start keeping your personal and company expenses separate. Gradually, you may seek more significant funding sources, such as loans and investors.