Broadcast Commercial Business Finance

The world of broadcasting is ever-changing. It doesn't seem long since terrestrial television was rendered obsolete by satellite and cable, and now PC, mobile and tablet viewing is becoming even more dominant. In fact, 9 out of 10 UK households have used a streaming platform in the last year, while 58% of UK households are subscribed to at least one of these services.

Taking advantage of the opportunities presented by streaming video on demand means new standards for everything from compression, with H265 looking set to dominate, to billing and revenue streams. The scope for marketing over IP, with targeted advertising and result-oriented payments is huge.

Technology has also slashed the costs of broadcast quality content creation as well as distribution, opening the door for a new generation of production companies.

As a company operating in this space, you will be aware of the fast-moving nature of the broadcasting world. In order to keep up with changing viewing habits, you may need to update your technology, equipment, software or even all three. This is where broadcast finance can help.

If you're ready to apply for funding, or want to know more about what's available to you, get in touch with our team today. Or, alternatively, keep reading to dig deeper into the world of broadcast finance. 

Finance solutions for broadcasting businesses

Running and growing a broadcasting business will require significant upfront investment, particularly when it comes to the acquisition of equipment and software. Thankfully, there are several different funding options available for businesses like yours, allowing you to spread these costs over easy monthly payments. 

You may require broadcast finance in order to:

• Set up a new content creation, broadcasting or distribution business
• Acquire premises
• Acquire equipment and assets
• Provide working capital
• Finance growth
• Deal with tax

Funding a new content creation, broadcasting or distribution business

Starting a TV broadcasting company used to be the preserve of major corporations. With advances in technology and the drop in prices of video cameras and computers, it might not be expensive as you think to kickstart your venture.

There are now providers that will host your video content, and support your revenue generation at the same time. By outsourcing some of the resource-heavy aspects of the business you can set up a broadcasting - or narrowcasting - business. However, even the most streamlined company will encounter some unavoidable costs.

Firstly, you’ll need to think about how you will structure your business. A limited company or a partnership may be the most appropriate foundation for the future. The costs involved for incorporation are minimal. Even if you are a sole trader, it could be easier to setup as a company from day one. Ultimately, it all depends on your long term goals and the timeframe in which you want to achieve them. 

Production costs 

If you intend to produce your own content, you should already have a clear understanding of the costs involved. A high-quality dramatic production could easily top £1 million per hour. Reality TV might cost tens of thousands, while Vox Pops or reportage could be produced at a fraction of that. It all depends on your company's USP and how best to get that across to your target audience.

Marketing and website

Securing your business’ name in domain form (.com, .co.uk. etc) will be vital. Registering a suitable name may cost only a few pounds, but if you need to buy a name that is already registered, you may need to negotiate with its registered owner. You may need to pay hundreds, or even thousands, of pounds to get a particularly valuable domain name. Using a variation, such as a .biz domain rather than the more familiar .com might be a more affordable alternative.

Setting up your website and promoting it through social media will be another essential investment. You might expect to spend £5000 to create even a simple website that is ready to present your services.

Building an audience for your content will also require investment. If you need to approach a broad base of end-users, marketing costs may be in the millions, although you could build a loyal audience for specialised material relatively cheaply.

Computer hardware and equipment 

If you are creating any kind of content, you will need a studio and editing suite. It may be possible to hire facilities, but time costs may make it more cost-effective to lease or buy your own.

The total costs of all these essentials will depend on your circumstances and your business model. You should remember that you will also have operating costs which will require funding until your business finds its audience and revenue stream.

Funding for startups can be difficult with many lenders. However, with a sound business plan and experience within the sector, you may be able to borrow the necessary funds with a startup loan, or a secured or unsecured loan. 

Asset finance is also a really useful way of funding the more expensive acquisitions for your business, more on that later. 

Buying a broadcasting business

Buying an existing broadcasting business - whether as a partner buy-in or a complete buyout could offer an established revenue stream and a proven business model.

However, the costs may be very substantial, depending on the sector, the turnover, the potential it offers, the assets it already has and the skills and qualities of the staff who will stay within the business.

A Secured loan could help you to borrow the large sums required for a buy-in or buyout. You might also consider ‘jigsaw’ funding. This is a bespoke finance package, made up of a number of loan types, such as a commercial mortgage for the premises, with other loans to cover goodwill, and asset finance for the equipment.

Contact us to find out more about funding for buy-ins and buyouts.

Funding for premises

Your business will need premises. An office will be essential, and you may also need studio, editing and technical space.

Even a serviced office or studio suite will require an upfront payment. If you want to move straight into your own office complex,  you will also have additional costs, including power and business rates to budget for.

Renting may be unavoidable in the early days. However, renting premises restricts what you can do with your space, and means ongoing costs, and puts your business at risk of rent increases. Buying premises with a commercial mortgage could be a sound investment. If you already own your premises, a commercial mortgage might also be a cost-effective way to raise funds to use elsewhere in your business.

Asset Finance

All businesses require some level of assets, but those in the broadcasting industry rely on expensive equipment. So, you will need to budget for this equipment, as well as any ongoing maintenance and repairs. Since equipment downtime will undoubtedly cost you money, having the right finance structure in place could be your saving grace during difficult times. 

Asset finance works by making the equipment or ‘asset’, the security for the loan itself. This means that if you were unable to repay, the lender could simply repossess it. This reduces the risk to the lender and consequently the cost to you.

So, whether you are buying conventional office equipment or highly specialised cameras, computers and recording equipment, then asset finance can help you manage the costs. 

Some of the most common equipment purchased with broadcast asset finance includes:

• Cameras
• Microphones
• Audio recorders
• Portable video uplink technology
• Media storage
• Live streaming system
• Lighting rigs

Hire Purchase and Leasing can help make virtually any type of equipment you need affordable. There are several types of asset funding and rental:

Hire Purchase

Hire purchase lets you spread the cost of buying the equipment you will use for the long term. Arrangements generally last between 12 and 72 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours.

At Rangewell, we can often help set up HP agreements that undercut those of equipment suppliers, or which let you take advantage of the lower costs of pre-owned equipment.

Leases

Finance and Operating Leases work like rental agreements and let you spread the cost of equipment with no upfront payment. This type of finance could be the best option for equipment which will have a limited life. You can simply return it to the finance house at the end of the lease, allowing you to update to the latest technology. This may be particularly appropriate to the broadcast sector, where the pace of technological change is rapid.

Contract Hire

Contract Hire can be the most cost-effective way to provide company vehicles.

Supporting your cash flow

Managing cash flow is paramount to the success of any business. If you don't have a strong cash flow strategy, a few late invoices could be fatal for your broadcasting company. 

Protecting your business from such risks is really important, but thankfully there are funding solutions to support you to maintain healthy cash flow and ensure your business keeps going strong, even if you find clients paying late or encounter an unexpected tax bill 

Either Working Capital Finance or a Revolving Credit Facility could work well for your business, depending on your circumstances. 

Working Capital Finance

Working Capital Finance helps you to continue outgoing costs, especially during the early days of your business. This facility is designed to support with operating expensive, such as staff costs and supplier bills, especially when cash flow is a struggle. 

This usually takes the form of a short to medium term loan. 

Revolving Credit Facilities

A Revolving Credit Facility is a common alternative to a traditional overdraft. This is usually a line of credit with an agreed limit, and you only pay for the money you take out, making it a cost-effective way of accessing funds when you need to. 

Invoice Finance

As a broadcasting business, you likely function as one of several moving parts in a bigger production. Even if you offer a wide range of services, you will still work alongside other companies on projects and may even subcontract or outsource work to other suppliers. 

When working with and for other companies, you may encounter late payments, which will have a negative impact on your cash flow. Invoice finance could be the solution for you, as it bridges the gap for outstanding invoices and helps you cover any costs while you await payment. 

Tax Loans

You will face substantial quarterly VAT or annual tax demands whatever your revenue stream. These can cause serious problems with your cash flow. Tax Loans help you to spread the cost of your tax demands into affordable monthly payments.

• Better control of cash flow
• Fixed monthly payments
• Quick and simple to arrange
• Avoids issues with HMRC, potential penalties and professional liabilities

Mezzanine Funding

Many lenders will simply not be able to lend you sufficient funds for major costs. Building a state-of-the-art studio, or funding a major production may cost several million pounds.

Equity funding could provide the scale of funding you need. There’s nothing to repay because you are basically selling a share in your business. However, it might mean you lose partial control of your company, and it will certainly mean sharing all future profits with your investors. Equity investors make their return from your growth.

Mezzanine Finance can provide a third way to raise the funds you need. A lender will provide the funds you need, secured on the future of your business. They will offer a high level of funding, but you will need to repay their debt and interest charges - if you fail to repay, they will have the right to take an agreed proportion of equity interest in the company.

Funding your broadcasting business

At Rangewell, we work with businesses throughout the broadcast, AV content creation and AV sectors. We understand your business and the potential it offers, as well as the challenge you face.

We can use the expertise we have built up to help you find the financial solutions you need to capitalise your business, whether you want to fund capital expenses, working capital or growth.

As well as conventional finance products, we can help you find Alternative Funding, using new loan providers and styles of funding. We know the lenders who can offer the most competitive rates for your sector. Whether you have a straightforward finance need, or require a complicated ‘Jigsaw’ funding plan made up of a combination of products, we can work with you to find the right broadcast finance for your needs. 

Call us now to get our experts working for you and the future of your business.