SELF-FUNDING: BUILDING AN ARMY OF FANS FROM THE GROUND UP

(The Musician’s Atlas Plugged interview with Eli Ball)

Eli Ball, CEO of LYRIC Financial, formerly known as First Entertainment Financial, LLC in Nashville, TN has specialized in funding music projects since they began in 2006.

AP: Where are the headquarters of LYRIC Financial?
EB: Nashville, TN…Music City, USA!

AP: Are you affiliated with First Entertainment Credit Union in California?
EB: No, the possible confusion with the credit union is why we are rebranding it to LYRIC, it will be official as of May 1.

AP: Does your institution specialize in the entertainment industry?
EB:Yep…that’s all we do. My gig is to develop new and hopefully meaningful financial products for the music community.

AP: Why should a musician consider using LYRIC?
EB:Since everyone at LYRIC is related in some way to the music business, we understand the unique challenges facing music professionals. Simply, what we do is take music assets, like the future value in a song catalog, and convert that into the cash needed, without jeopardizing the artists or label’s ownership of the catalog.

AP: How does LYRIC help Musician’s fund their music projects?
EB:We work with the artist/writer, publisher or label to develop the appropriate financial solution for their specific need; recording, marketing, touring, or personal.

For example, we have developed a royalty advance program called, FastForwardMyRoyalties to help with short term financing (less than 1 year), which is available to songwriters and publishers affiliated with BMI. Takes about a day to process, application is online and there’s no credit qualification…pretty simple and safe. We have other programs available for musicians and publishers seeking longer term financing as well.

It is very important for an artist to view his/her career like a business, which means being very aware of what assets (rights) you own and what they are worth. Generally, when you borrow money from a bank you have to pledge collateral that is worth at least as much as the loan and usually more. That means that if you don’t repay the bank, it has the legal right to seize the collateral and sell it or do whatever the bank wants to do with it.

While no lender wants repossess your house or your songs (it’s bad for business and the bank usually loses money), the fact is they have that right, if the terms of the loan agreement are not met. We created the FastForwardMyRoyalties advance program to avoid that risk for all involved, artist and LYRIC.

AP: What assets does an artist need to qualify for a FastForward Royalties advance?
EB:Traditional assets are not needed for the FastForward advance, just an established royalty stream or a projection from BMI if it is a new song on the charts. And we hope to have the other licensing organizations (PROs) signed-up by year’s end, both performance and mechanical.

We have other active programs that also benefit ASCAP & SESAC members: Performance loan program up to two years for artists with established PRO earnings history that need access to more than a year of royalties. We also have an All Access Line of Credit for artists with established catalogs; kind of like a home equity loan, but backed by the value of your catalog instead your home.

AP: How much can Artists raise via a LYRIC Financial program?
EB:Depends on their income base. For artists with performance income from BMI, ASCAP, or SESAC, the artist can generally get up to 90% of their projected two-year earnings. If the artist has an established catalog of albums that are still selling, he or she may be able to get up to 50% of what they would earn over a 12-18 month period; with minimum earnings of at least $50k per year.

AP: What happens if they don’t meet the earnings expectations – what is the penalty, fees, re-payments, etc?
EB: We are pretty comfortable with projecting what the two year earnings on a song or catalog will be. In the rare event that the earnings don’t reach our projection within two years, we simply renew the note until the loan is repaid. There are no penalties or late fees. Further, if the artist, songwriter or publisher would like to prepay the loan early, there is no prepayment penalty.

AP: Are all musicians eligible?
EB: This program is geared towards artists, songwriters and producers who earn royalties from a PRO or label. Non-US artists must have a US-based PRO, i.e. a London songwriter who is a member of BMI would be eligible.

AP: Aside from the creatives (songwriters, performers) what other music biz entrepreneurs does Lyric support?
EB: We work with publishers, labels, and managers who have businesses with established earning history.

Visit LYRIC online to learn more about their financing programs.