How To Get A Loan For Musical Instruments Or A Studio, And Should You?

How To Get A Loan For Musical Instruments Or A Studio

Money can be an ongoing challenge for musicians and studio engineers alike.

But a musician can’t perform without instruments, and an engineer can’t record without studio gear.

For some, taking out a loan might be a good way to get the ball rolling. For the most part, I don’t advise going into debt or securing a loan to purchase equipment, but there are some situations where this can be advantageous. Just don’t borrow money lightly.

When Is A Good Time To Borrow?

Practicing delayed gratification and purchasing when you’ve saved up the appropriate amount is hands down the best way to manage your money and get the gear you need. Also, keep in mind that many people sell instruments, amplifiers, and studio equipment in a down economy, which means now is the right time to hunt for bargains.

But here are several scenarios in which borrowing money might be the right move:

  • When you have a string of paying shows booked. For example, your performance schedule for the next month is booked up, and all shows are paying, but you don’t have a guitar to perform with. Arguably, you could still rent a guitar for this period, and it wouldn’t be expensive, but if it seems like good paying opportunities just keep coming your way, you might consider going on a payment plan for that guitar and keep that momentum going.
  • When you’ve just landed a major session playing gig. If you’re going on the road with Taylor Swift or someone like that, now’s not the time to worry about paying down an instrument. But if you’re in that situation, you can probably talk to the touring manager about giving you an advance or taking it out of your paycheck.
  • When clients are lining up at your studio to record with you. This can be a bit of a precarious situation, so beware, but we’ll say you’ve just booked several new clients at your studio, and you need to replace your studio monitors to accommodate them. Again, since you have cash flow, you should be able to pay down those monitors faster than if you didn’t have any leads or clients.

There may be other situations where borrowing could be a solid move, but it mostly comes down to whether you have cash flow or not. If not, don’t bother. Now, let’s look at a few ways you can obtain funding.

Sign Up For A Credit Card

Let’s face it – most banks aren’t going to support your music career. They rarely hand out loans to people that can’t show steady income over the last five years, and don’t have saleable assets or co-signers, let alone to a musician.

Meanwhile, consumer debt is socially accepted, and when you finance products on a credit card, no one is going to ask you what you’re putting the money towards.

Unfortunately, interest rates are going to be extremely high, and if your credit rating isn’t great, you could get roped into bad deals without even knowing it. You can keep making minimum payments indefinitely, but then you’re just fueling the monster that is consumer debt.

Financing musical gear on a credit card is somewhat common practice, but rarely if ever the best option.

Visit Your Local Instrument Retailer & Ask

Should you aim to get a loan to start out your music career?

In Canada, we have an instrument retailer chain called Long & McQuade, and they will allow virtually anyone to finance musical equipment. It seems they know their market well.

In the U.S., Guitar Center (they have something called the Gear Card which you can apply for online), and Sweetwater (they have a 0% interest for 24 months card) are some of the more popular stores. If you aren’t sure whether they offer financing plans, go in and ask. You may be pleasantly surprised.

Just avoid a situation where money is being debited from a credit card, and you’re paying interest twice (in-store and on your credit card).

Instrument retailers generally have flexible options for musicians, so this is often the best way for musicians to finance equipment.

Make A Business Plan & Approach Traditional Sources

Let’s say, for instance, that you’re looking to set up a recording studio from scratch. You want to buy a building, renovate it, install sound treatment, and purchase recording equipment. I’m not sure why you would take that risk in this era (more and more musicians are opting to record from home or in a home studio), but for anyone looking to make larger purchases, credit cards and in-store financing probably won’t cut it.

The first thing to do is create a thorough business plan, outlining what products and services you’re going to offer, how much you’re going to charge for them, what your projected revenue is for the next five to ten years, who your competitors are and how you’re going to compete with them, how you’re going to market and promote your business, and so on.

Whether you’re a musician or a music producer, you are a business, and you can set yourself up like one. Once you have your plan in place, you’ve registered your business, and the wheels are in motion (i.e. you’ve started executing on your plan), it’s time to research traditional sources of loans, financing, or investments.

You can look at: Venture capital, angel investors, bank loans, grants, and so on.

Now, if I’ve given you the impression that it’s easy to get funding from any of these sources, it isn’t. Crowdfunding might be a better option if you’ve got a larger number of supporters that would be willing to help you out with smaller amounts of money. But if you require larger amounts of funding to get your project off the ground, you can’t rely on credit cards, 401ks, in-store financing, savings, and so on. You’ll need to sharpen your problem-solving skills.

Final Thoughts

Many people are looking for instant gratification, but when it comes to matters of money and business, I believe it’s best to take a long-term view. Maybe you can’t save enough money to get your venture off the ground in a few months. But what about in a few years? There’s no reason to rush the process. If you can pay for it in cash by saving up for a few years, then you can take that time to think about other ways to make money (to speed up the process), and study up what it will mean to be in business once you’ve saved enough money to get started. That, to me, is big picture thinking.

P.S. Remember though, none of what you've learned will matter if you don't know how to get your music out there and earn from it. Want to learn how to do that? Then get our free ‘5 Steps To Profitable Youtube Music Career' ebook emailed directly to you!

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