Working capital is scarce. Our guide helps you explore the options and choose the best one.

Managing your career as a composer, recording artist, or other music creative is remarkably similar to operating a small company.

In today’s DIY music world, there’s a lot of debate over music distribution, fan promotion, social media, tour booking, etc. But most creative workers lack guidance on managing their money.

Working capital (or “money” to you and me) is a need for all small companies. Working capital meets immediate financial demands while investing in future goods and services—payroll, bills, inventories, etc.

When cash flow is constrained, these companies take out working capital loans. How can creative people survive? Except for the most successful artists and composers, working capital is scarce.

Find out more loan options at Bridge Payday.

Label/ Publisher Advances

Historically, advances from labels or publishers have been the solution. This is far from certain.

• Advances must be “recouped,” meaning the label/publisher keeps your future revenues to cover their expenditures (recording time, music videos, etc.). The label/publisher typically ends up owing you if you don’t recover.
• Labels’ coffers are tighter these days, so improvements are fewer and give less. Publishers are even less willing to advance money, and several collecting groups have ceased doing so.

Private Advance Services

Desperate intellectual rights holders have resorted to private advance businesses. These firms guarantee quick cash for what seem to be acceptable conditions. Due to compounding interest rates and tight restrictions, pay back your debts and regain ownership of your copyrights.

Your earnings from new songs created following the advance contract go towards paying it off rather than into your pocket.

Crowdfunding

A newer and more exciting alternative to conventional lending is crowdfunding. Fans may sponsor music projects via Kickstarter, Patreon, and PledgeMusic. After completing the record, their names are generally mentioned in the liner notes or another acknowledgment.

Thanks to crowdsourcing, no recouping scams or abusive advance loan rates exist. The disadvantage is using future revenues to fund the project, reducing profit.

Crowdfunding is not guaranteed. Wickstarter claims 54% of music projects succeed, leaving 6% unfunded. This option is only available to popular creators. AIt requires a lot of marketing and fan engagement. 

Bank Loans

Businesses may use their inventory, property, and other assets as collateral for loans. Banks know these things. Artists with royalties have fewer options. Some banks will lend to artists using royalties as security, and these loans take a long time to complete.

Banks are also extremely cautious in their lending. That implies smaller loans.

Catalogs Selling

When royalties start to dwindle, artists may try to sell them. Publishers will always be eager to increase their collection, willing to accept your revenues.

They usually search for royalties over a specific level, and it’s usually an all-or-nothing transaction, taking 100% of your stake and removing all future control.

Moreover, these arrangements are usually made in secret, undervaluing royalties. Buyers offer large amounts to discourage comparison shopping, but it’s difficult to discern whether you receive the best bargain.

Negotiation Game

Except for crowdfunding, all alternatives need you to negotiate. In this case, they’re bargaining against you. They want to get a decent bargain. It’s a no-win situation for you.

The Artist-Friendly Alternative 

Royalty Exchange allows you to sell royalties and obtain cash advances. Our online marketplace connects artists with private investors who want to purchase royalties or lend money guaranteed by royalties.

This has several benefits:

For starters, there’s no nickel-and-diming or predatory lending. Then you won’t have to question whether you sold at the right price. Everyone may view tall transactions and loan prices, conditions, and details Transparency among investors leads to the best bargain for artists and rightsholders.

Our method gives you freedom without compromising your copyright. It’s not an “all-in” arrangement that leaves you with no future revenues. You may sell a portion of SoundExchange or PRO income sync royalties collected from a single song, album, or library.

It lets you use earlier efforts to fund new ventures. Selling a royalty share from a past-its-prime project enables you to finance a new product with more immediate income potential while preserving future royalties. And whatever money you earn from your songs after the transaction goes into your pocket.

We don’t bargain against you—no royalties or advances. We are the market. So we only succeed if you succeed. We benefit from better deals for you. So we share interests.

Royalty Exchange is a Fair, Fast, and Flexible Career Financing Alternative.