Once you’ve decided on a budget, you’ll likely start thinking of ways to fund your recording project. Here are the pros and cons of each funding option:
- Pros: No interest rates means money in your pocket sooner once you recoup. You’ll often get a break on pricing by paying in cash versus credit as well.
- Cons: None.
- Pros: If you have a credit cards reward program you can get points/miles to use to fund future touring endeavors.
- Cons: High-interest rates if you don’t pay off immediately. Credit Card fees added to the total when paying for the record.
SMALL BUSINESS LOAN
- Pros: Lower interest rates than a credit card.
- Cons: Difficult to convince a bank to loan you money for a startup in the Arts & Entertainment industry.
LOAN FROM FAMILY MEMBER
- Pros: Flexible payment structure. Potentially interest-free. Lowest interest rates.
- Cons: If your record doesn’t recoup OR you decide you don’t want to keep pursuing a music career, this could make your familial relationships tense.
- Pros: Anyone can start a crowdfunding campaign. Side note: Even if you can afford to fund the record on your own, I would still recommend crowdfunding because it’s a great way to engage your fans and let them feel like they’re a part of building something with you.
- Cons: Depends on the platform but there are situations where you won’t see a dollar unless you reach 100% of your goal. Often artists promise too much to donors and are unable to fulfill promises after project completion. More on this next week…