Starting a recording studio can be a great business. The music industry globally is a business that handles billions of dollars annually. Canada has always had a very ambitious and growing musical community inspired by big-name Canadian artists like Celine Dion, Drake, and Justin Bieber. If you can launch a new recording studio and attract a brand-name artist like this, you could turn a great profit.
Of course, music is not all about business. It’s also about making great art and finding new friends in fellow musicians. The only problem is that the life of an artist is not easy. Art like music does not make money right away. If you have been a musician for a while, you bank account may reflect this sad reality.
Opening a new recording studio requires a large amount of capital. Not only would you have to spend a lot of money on buying or renting a property, you will also have to spend a lot of money acquiring expensive equipment like vintage microphones, consoles, and A/D converters. Considering all such expenses, you will need to invest between $10,000 and $100,000 to open a recording studio.
As a musician, you most likely will not have ready access to that amount of cash. If your credit is bad, the local banks would most likely turn down your request for a business loan. If this conventional approach is not working out for you, don’t worry. There are plenty of other ways to finance your recording studio.
Borrow Money from Family and Friends
The easiest way to finance your recording studio without going into debt is to ask family and friends for the capital. You can pay them back when your studio attracts musicians and turns a huge profit. Importantly, when you repay your family or friends, you will not have to pay an interest. Therefore, it’s best to obtain at least a portion of your funding in this manner, if not all.
Crowd-source the Necessary Funding
Crowd-sourcing is not limited to the tech industry. If you have a great idea for a recording studio, you can use a website like Kickstarter or Indiegogo to launch an online campaign for donations. The funding system works differently depending on the site you use. You don’t have to refund the money you get. But, you may have to offer a product or shares in your recording studio once it’s up and running. Some will simply give your campaign money without asking anything in return.
Obtain a Special Recording Studio Loan
Some lenders in Canada specialize in offering loans specially for aspiring recording studio artists. Lenders claim to offer loans even with bad credit. This is a worthwhile option to consider. However, be aware of high interest loans and the reputation of the lender. You must be cautious when obtaining any type of bad credit loans.
Speaking of investing, there are great options like high dividend paying stocks to invest in for your future. If you have bad credit and don’t feel ready to make decisions like this, you can get a secured card that will allow you to build credit, making it easier to take out loans to invest with.
Borrow Money against the House
If you own a house or a similar property, you can obtain a line-of-credit loan. This type of loan is also commonly referred to as a second mortgage. Basically, you will be borrowing money against your house, offering the value (equity) of your house as collateral. Second mortgages are secured loans and you will not have to pay sky-high interests. However, you could face the very real risk of losing your house if your studio fails and you don’t repay the loan. Therefore, think very carefully before borrowing against your house. You must be sure that your recording studio can become a success before doing so.
You can also consider having artists finance your studio. If you have a number of musician friends, everyone can pool their financial resources and start a recording studio as business partners.