The Best Options to Find Music Business Funding

There are few businesses as exciting or creative as those within the music industry. But, at the same time, funding a music business tends to require much more capital than other lines of work—if you’re looking to open up your own recording studio, rehearsal space, or propel your band to the top of the charts, you’re going to need a surprising amount of music business funding to reach those goals.

Just like any other business, though, obtaining the right kind of small business loan for your musical venture depends on the type of project you’re undertaking. Some music industry businesses require funds to rent or buy a space and outfit it with (often expensive!) gear; for others, you might only need working capital to travel from venue to venue.

We’ve compiled a few of the most common music businesses and the small business financing tools that would best help them get started (or keep going).

Owning a music business may have been your lifelong dream. But the inescapable reality is that it’ll take large amounts of capital to make that dream come true, regardless of which type of musical venture you’re operating.

There are, however, significant financial differences among these ventures—for instance, the kind of music business funding required to open a studio differs greatly from the money needed to start a promotion or A&R shop. But in general, the bigger your plan, the more money you’re going to need to fund it properly.

Here’s what you’ll need to know about music business funding, depending on what company you’re looking to launch and operate within the industry.

Opening a rehearsal and recording studio could be a lucrative idea—lugging equipment to a friend’s musty garage doesn’t compare to practicing in a space that’s specifically designed for great acoustics. Rehearsal spaces and recording studios are vital for musicians, especially in cities where space is at a premium and neighbors abound.

Opening this kind of space provides a great evergreen business opportunity for entrepreneurs but come with significant equipment and startup costs. You’ll need to outfit rehearsal rooms with gear, install soundproofing, and give your rooms a comfortable feel if you want to attract and retain clients. These initial costs are often pretty high, even if you’ll recoup most of your expenses as your space gains a reputation as a great place to play and record.

Phil Feinman, co-founder of Bedrock.LA, a rehearsal and recording studio in Los Angeles, started his company with his two business partners and an initial investment of personal capital from each of them. But personal capital can only take you so far—at a certain point, you’ll likely need a cash infusion through a business loan.

“Opening a rehearsal space with recording studios in LA requires you to purchase a lot of equipment upfront, which can get expensive pretty quickly,” says Feinman. “And once you’re off the ground, operating costs and repairs are usually your biggest expenses.”

If you’re a rehearsal space or a recording studio, here are your best loan options.

If you’ve dreamed of finding the next great musical act, or merely want to help a community of artists get noticed, you’re probably thinking about starting a record label. Doing so can be tricky, but the satisfaction that comes with creating your own version of “Empire” can make all of the hard work (and expenses!) worth it in the end.

Creating your own label is capital-heavy work: You’ll need to travel when you scout for artists, finance the production of your artists’ music, and pay for distribution across online and physical platforms.

If you’re operating a record label, here are your best funding options.

Imagine opening the venue that helps an undiscovered band get its first big break or becomes your local music scene’s live-music mecca. Finding the right music business funding to open the venue of your dreams, however, can seem fairly daunting.

Obtaining music venue funding is actually fairly similar to financing a restaurant or funding a bar. Each of these institutions require significant equipment investments, as well as real estate financing and inventory costs. And to launch a music venue, you’ll have to find your location, build out the stage and speaker system, and keep your bar stocked. That’s no walk in the park.

There are a ton of moving parts behind any successful music venue, of course, but that doesn’t mean that it’s an impossible goal. The right kind of financing for your music venue mostly depends on which aspect of your venue you’re funding. Here are some options.

Here are your best loan options as a music venue.

We’ve focused on producing, recording, and playing music. But we haven’t touched on another vital section of the industry that keeps bands humming: selling and repairing gear. Most musicians want, or need, to use more than one instrument at any given time, and all of those instruments require an occasional tune-up. This provides musical instrument shops and repair technicians with a perennial market for new business.

If you’re opening an equipment shop, you’ll need to focus on three major expenses: inventory purchasing, real estate, and payroll. And if you’re opening your own repair business, you’ll need to purchase the equipment, tools, and raw materials you need to get your customers’ gear working again.

If you’re selling or repairing musical equipment, here’s what we recommend for music funding options.

There are plenty of factors, let alone expenses, in starting a music business. But just because each of them come with their own requirements doesn’t mean that one of them is inherently more difficult from the next, as least as far as music business funding goes.

There are a variety of loans out there that are designed to help entrepreneurs accomplish specific goals: the most important thing you can do is know exactly what your business and personal financials are, and which aspect of your music business you need to fund. From there, you can find the type of music business funding you can actually secure—and which can make your musical dreams a reality.