Securing funding and investment is a great way to get independent record labels and music projects of the ground, and cover the any costs that come with producing music, touring and running a successful label as a business. We are often asked about ways to get funding for musicians and labels, so here's a guide to the basics and some of the best potential sources.
Getting outside funding for your music isn't easy, so it's important to take time to research your options, decides what’s best for you, and don’t rush into any major decisions to quickly.
Before we get into the types of funding available to independent label owners and artists, here are some key things to consider.
The basics of securing music funding
Finding a trustworthy funding source
First and foremost, you’ll need to find where your funding will come from. Make sure your source is reliable.
A bad investment or loan source can cause all sorts of problems down the line, so watch out for extortionate interest rates or investors looking to take more control of your company than you would be comfortable with. Do your research; don’t just take the money and hope for the best.
Know how to approach
Different sources of funding and investment will require different approaches, but the best place to start is by writing a record label business plan. You’ll need to know the aims, finances and forecasts for your business inside out, and writing a clear plan is a great way to get it all down on paper, whether you're seeking investment right now or not.
Also, when you apply for funding, make sure to check every single detail of your application. Follow any application guidelines to the letter, check for spelling and grammar and get someone else to proofread it. You don’t want to blow your chances over an avoidable mistake.
Decide how much you need
It’s always wise to work out a watertight budget before you start looking for investment. That way you can decide how much you need, rather than how much you want.
Generally, there’s no such thing as a no-strings-attached investment, so taking too much money could be unwise, especially if it comes to paying it back. In contrast, taking too little cash could be a bad move, leaving you out-of-pocket before you get the chance to make a return. Think very carefully about how much funding you’ll need.
Spend it wisely
This should really go without saying, but plan exactly what you’re going to spend every penny of your funding on beforehand. Don’t splash it all on Dom Perignon and Gucci threads! Make a sensible and realistic plan for your cash flow.
Types of funding for musicians & labels
Start-up loans
Start-up loans are one of the most common ways in which new businesses get the funding they need to grow and develop. You can approach major banks for a business loan, but you’ll need to make sure your business plan, credit score and research is all up to scratch to stand a realistic chance of securing a loan. Also, label owners based in the UK can get help accessing start-up loans with the Professional Record Label in a Box package.
Don’t rely on high-interest lenders. It may seem like an easy way to get some quick cash, but you could end up owing much more than you can afford.
Arts grants
Arts grants are a great option for creative professionals looking for a bulk cash sum to get their project off the ground, especially as you usually won’t have to pay anything back. These grants aren’t available to just anyone and they can be incredibly competitive, so you’ll need to prove you deserve the money and demonstrate how you’ll use it.
There are a few ways to apply for arts grants. If you’re based in the UK, you can apply for grants from Arts Council England, PRS and other sources.
For artist and labels in the USA, opportunities for grants are available from New Music USA, National Endowment for the Arts and more.
Musicians and labels in Australia can apply for grants via organisations including Australia Council for the Arts and APRA AMCOS.
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