Finance for Recording and Reproduction
The recording industry is highly competitive. We can help you find the financial solutions you need to stay in the lead.
- Spread equipment costs over 6-60 months
- Rates from 6%
- Undercut ’0%’ deals from equipment suppliers
- Balloon payment options - reduce monthly outgoings
- Avoid working with outdated equipment
- Acquire any type of equipment
- Asset refinance available
- No upfront capital costs
- Secured lending - from 2% above base rate
- Raising funds with a commercial mortgage 2% above base rate
- ‘Jigsaw’ funding
- Asset refinance - releasing investment to use again
Speak to real business finance experts who really understands business financeAt Rangewell our team business finance experts have real expertise. There are over 25 lenders who offer specialist finance - so use our expertise and contacts to make sure you find the funding solutions you need.
The recording industry is changing, but the demand is still there for a thriving business with the right equipment and set-up.
The recording industry has gone through a series of technological revolutions, with analogue and tape being replaced by digital audio workstations, and vinyl, CD and DAT being replaced by downloads and streaming.
But although the technology continues to change and improve, the industry still depends on delivering the highest possible quality reproduction to customers. It may be possible to capture a performance on a laptop with suitable software and microphones - but most commercial recordings will still take place in a fully-equipped studio, and building and equipping a professional studio will require a major investment.
At Rangewell, we can help you find solutions to your funding needs - not just for your recording equipment, but for all the needs of your recording business.
Understanding your Funding Options
You may need to find the right type of funding option to allow you to:
Acquire equipment and assets - including soft assets
Set up a new recording business
Provide working capital
Deal with tax
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Funding your equipment
If you are planning a professional studio, rather than a hobby recording facility, you will need a long list of equipment:
Monitor Isolation Pads
Studio Monitor Stands
Studio Rack Mounts
Electronic Drum Kits
Uninterruptible Power Supplies
Even with the most basic specification, costs will run into tens of thousand of pounds. This cost need not be an obstacle to your plans. Asset finance - hire purchase and leasing - can help make virtually any type of equipment you need affordable by allowing you to spread the costs and make monthly payments.
Asset finance works by using 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 that you pay. There are several types of asset funding:
Hire Purchase (HP) lets you spread the cost of buying the equipment you need with arrangements generally last between 6 and 60 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours.
Equipment suppliers will frequently offer HP deals to help them secure a sale. These may seem attractive - but can include hidden costs which push up the real price you pay.
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.
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, leaving you free to update to the latest technology. This may be particularly appropriate to the recording sector, where the pace of technological change is rapid, and being forced to use older equipment can compromise your quality.
Soft assets include vital items such as soundproofing which are essential for your studio - but which can be very difficult to finance. Conventional asset finance is geared to ‘hard’ assets such as microphones and mixing desks, which are relatively easy to sell on, and so preferred by most lenders.
At Rangewell we can help find lenders who can provide funding for soft assets <link>
Funding for premises
Your recording studio will need premises. An office will be essential, as well as studios and editing and technical space.The ideal studio location must be easy for clients to find, with good parking and good transport links, and will probably need to be in use outside normal working hours.
While it may be possible to set up in a shared technical space, the need for soundproofing may restrict the choices available to you. You will need to budget for conversion of the bare space to your particular needs. You will also have additional costs, including power and business rates to budget for.
We can provide solutions for your premises leasing needs <link>
Renting may be unavoidable in the early days of your business. 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 <link> could be a sound investment, as it could allow you to plan your facilities without compromises.
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.
Setting up or buying a recording business
If you are ready to set up your own recording business, remember that you will need funding for operating expenses and marketing as well as equipment and premises.
Funding for start ups can be difficult to obtain from the majority of lenders, who will prefer to work with businesses which can offer a trading history and evidence of profits as a basis for their lending decisions. However, if you have a sound business plan and experience within the sector we may be able to help you find lenders who can help. Start-up funding usually takes the form of a secured loan, with the security provided by an asset such as your home, although smaller sums may be available with an unsecured lending arrangement.
Buying an existing recording studio business - whether as a partner buy in or a complete buy out could offer an established revenue stream and a proven business model. Finding lenders willing to help may be simpler as a result.
However, the costs may be very substantial, depending on its current turnover, the potential it offers, the assets it already has
and the skills and qualities of the staff.
A secured loan could help you to borrow the large sums required for a buy in or buy out. You might also consider ‘jigsaw’ funding. This is a bespoke finance package, made up of a number of loan types to provide the most appropriate funding for each item you need to finance.
Working capital finance
Working capital finance can help you stay afloat and pay staff and suppliers during the early stages of your business. It is designed to provide the operating expenses, from staff costs to supplier bills while cashflow is slow. It is usually designed to be repaid in the short- to medium-term, once your recording business is fully on its feet.
Large scale finance can be vital if you have major plans such as acquiring a competitor. Growth finance can help. Lenders may require an established trading history and record of profits, but it may be possible to arrange Growth Finance based on your profit projections, rather than on your trading history.
Revolving credit facilities
Overdrafts are a well known form of business finance, but banks may be reluctant to provide them. Revolving credit facilities can be an alternative, providing a line of credit, with an agreed limit that you can call on when you need it. You only pay for the money you take out, so it can be a cost-effective way to raise funds if you need them.
Find out more about ways to smooth your cashflow <link>
There are various revenue models that your recording business might adopt. If your income stream is based around corporate sources, you may find that there are restriction on your cashflow as a result of late payments. An Invoice Finance arrangement, can bring you cash as soon as you issue an invoice, providing a flow of revenue that keeps pace with the amount of business you do.
Find out more about invoice finance <link TBA>
Tax loans - helping deal with demands
Whatever your revenue stream, you will face substantial quarterly VAT or annual tax demands. 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
Find out how a tax loan could help you smooth your tax flow <link>
Many lenders will simply not be able to lend you sufficient funds for the major costs involved in building a state of the art recording studio,complex.
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. It can mean losing control of your company – 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 funds. A lender will provide the funds, secured on the future of your business. They will be able to offer a relatively 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.
Find out more about how mezzanine finance can offer a high level of funding <link>
How we help you capitalise your recording business
At Rangewell, we work with businesses though the media sectors. We understand the recording industry 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 the sector.
Whether you have a straightforward need, or require a ‘Jigsaw’ funding made up of a combination of products, we can work with you to find the answers that are right for your business plans.
Call us now to get our experts working for you and the future of your business.
WHAT WE CAN DO
Arrange funding to help an entrepreneur to set up a new studio
Fund the purchase of an old school building for conversion into a recording studio
Find the most competitive loan to re-equip an established London studio with the latest recording equipment
Help find finance for a small record label to buy an established studio
Source a commercial mortgage to allow a small studio buy the freehold of its studio premises
Helping you build your profits
Lending tailored to the needs of your businessWe can help you find the most appropriate finance for any stage of your business development, letting you make the big repayments when your business has started to grow.
Protect your cashflowBorrowing the funds you need - rather than trying to deal with costs from your operating budget - can help protect your cashflow. It means a sound financial foundation for your business.
Asset funding reduces riskMost lending must be ‘secured’ on an asset of some kind that the lender may take if you don’t keep up the payments. If you were unable to repay the lender could simply repossess the equipment to cover their loss. No other assets are at risk.
‘Jigsaw’ fundingA single type of finance may not be enough. We can help you set up jigsaw finance - with the most appropriate type of finance for each particular need - to help you build your business.
Scaled for serious businessesMezzanine finance providers look at large scale businesses with a £3 million valuation as a minimum.
Specialist lendersSome asset funding providers may specialise in particular sectors. At Rangewell, we can help you find the most appropriate lenders for your recording business.
Download Rangewell’s free and detailed guide to finance for the Recording Industry
What types of finance are there - which do you need?
Why not all providers are equal - finding the one that’s right for you
How we can provide an additional income stream
The downsides to finance - and how to avoid them
How to arrange finance - what paperwork do you need?
Key terms explained
Getting the right funding arrangement is essentialThere are many forms of business finance. Getting the most appropriate type for your particular needs is essential to avoid paying too much.
Key equipment could be at riskIf you don’t keep up repayments on a hire purchase or lease agreement, the equipment your practice depends on could be at risk.
Long term commitmentsYou may not be able to pull out of a finance arrangement once it has been set up.
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