Yes, the ‘green shoots of recovery’ are looking a little more stable these days, but the UK’s clamber out of the dark days of 2008 and the subsequent worldwide recession hasn’t quite faded from memory, especially for the banking industry.
Despite a government that insists they should be investing in small businesses, banks are still very reluctant to start dishing out the dosh, especially to the entertainment industry. So how can you convince your bank that your DJ business is worth a punt? Here are five tips to help you to persuade them to say ‘yes’ to that bank loan:
#1 – Show them you’re serious with a business plan
No bank will even consider a business loan to a company that doesn’t have a plan. But it’s not easy to say where your DJ business will be in five month’s time, let alone five years. The entertainment industry is notoriously fickle, and you can be everyone’s golden boy or girl one month, and a ‘Johnny no-gigs’ the next. So diversify, and show that in a solid, structured and realistic business plan. A bank loan manager is far more likely to take you and your business seriously if you’re showing them you have a workable plan, rather than an expensive hobby.
#2 – Get the right DJ insurance
A loan is probably going to be tied to your assets, so make sure they’re protected and you’ll convince your bank manager you’re serious about safeguarding their investment. The right DJ insurance is essential, from public liability cover right through to car insurance that covers you for business use, and insurance for your kit. Don’t skimp on this and you’ll come across as professional and serious about your business.
#3 – Show them a working business that’s going places
No bank in their right mind will loan money to a ‘start-up’ DJ business, so don’t expect to decide on DJ’ing as your next career on Saturday and apply for a loan the following Monday! A solid business that’s got a strong track record and plenty of advanced bookings in the bag is more likely to impress a moneylender.
#4 – Don’t over-reach yourself in the early days
Taking out a loan is never a first option, especially if you have no guarantee that you’ll be able to maintain the repayments right through to the end of the loan agreement. So don’t overreach yourself financially if you’re just starting out. Second-hand kit is just as useable as brand new, top-end decks, so build your business from a solid base rather than going in for a loan from the outset.
#5 – Have some assets
A business loan is usually made against what is known as ‘security’, which can be anything from your house (if you’re a homeowner) to your business’ assets. If you don’t have any assets, you won’t get a loan, it’s that simple. Remember though, if you do secure a loan using your equipment as security then if you fail to repay the loan the lender will be entitled to seize your kit, leaving you penniless – and business-less!