If you’re a musician, you know that following your dreams and building your career takes money. High-quality gear, production costs, publicity expenses – it all adds up.
Where’s an indie artist to get the funding they need? Personal loans could be one option, but there’s much to consider before jumping into debt.
Let’s dive in!
First things first – be real with yourself.
Do you absolutely need a loan, or is struggling through with grit and hustle a better move? Debt should only be a last resort when you have a solid plan to profit from the investment.
Run through your business expenses line-by-line. What specifically would the loan cover? Gear upgrades? Studio time? Touring? Marketing?
The costs better clearly advance your career, or else skip the debt. However, have you exhausted all other options?
If you do borrow, start small. Get just what you need to take the next tangible step forward. Incremental growth prevents you from drowning in debt. Eventually, you’ll ideally reach a point where your music fully funds itself.
Key Takeaway: Only pursue a personal loan as an absolute last resort for clearly justified costs after exhausting all other options. Start small!
Okay, you’ve determined a loan is needed to fund a legit music business investment.
Now, you need to find the right loan for your situation. Here are key factors to consider:
Key Takeaway: Evaluate your assets and budget to select the ideal loan type, then compare multiple lender options for the best rates and terms.
Loan apps involve several steps – here’s what to expect:
Strong credit (650+ score) ensures the best approval chances and rates. So, fix any credit issues beforehand. Pay down balances, dispute errors, and become an authorized user on someone else’s account. A bit of extra work pays off big time.
Online personal loan providers like Level offer very competitive rates and a quick application process.
Key Takeaway: Prequalify with multiple lenders, thoroughly complete the application, and optimize your credit before applying to maximize approval odds and terms.
This is key – have a rock-solid repayment plan BEFORE accepting a loan. Those monthly installments will come around quickly!
Map out your anticipated income streams – gigs, streaming royalties, merch sales, etc. Then, deduct taxes, production expenses, and living expenses. The remainder absolutely needs to cover loan payments or else say no to the loan. Don’t trust “best case scenario” earnings – be conservative.
Key Takeaway: Thoroughly assess your budget to ensure loan repayments are manageable, use autopay, and communicate with lenders if issues arise.
Read More: Quick Guide on Paying Back a Personal Loan
Strategic use of personal loans can actually strengthen your credit profile over time. But ONLY if you repay perfectly. Let me explain.
Every on-time monthly payment gets reported to the credit bureaus. This gradually demonstrates you can handle serious long-term debt – the golden standard of creditworthiness.
But if you pay late or default, it crushes your credit instantly. Delinquency and collections wreck your score for 7+ years. You’ll be denied for loans, credit cards, and apartments. Not fun.
Key Takeaway: Handled properly, personal loans build your credit. However, missed payments or defaulting have severe long-term consequences.
Loans are just one option – also consider:
Key Takeaway: Each option has upsides and downsides. Mix and match strategies to fund your goals through both loans and non-loan sources.
Avoid debt until absolutely necessary, start small if you do borrow, and have a bulletproof repayment plan. Personal loans can provide serious financing power if used prudently. But they require extreme caution and financial diligence.
Your dreams deserve focus, but reality keeps the lights on. Weigh all options and only proceed once you fully grasp the gravity of borrowing.