Welcome to the first installment in “Advance to Possibilities.” As I mentioned last week the introduction to the series, the goal of the coming weeks is to answer all your questions regarding advances. So let’s get started!
What Is an Advance?
For our purposes, when we talk about advances, I am referring to a royalty advance. A royalty advance can be defined as “a pre-payment of royalties, whether the advance is paid by record company to an artist, a publisher to a writer or a merchandiser to an artist.” Advances are a cash management tool – not a loan. To put it simply, you are getting paid in advance (pun intended) for your work.
Why Should You Consider an Advance?
If you are an artist, you are a business. Businesses need financing at times to expand. So, why wouldn’t you? INVEST IN THE BEST!
When you think of yourself as a business, not just an artist or creator, the way you look at money will undoubtedly change. As a business owner, what is your primary objective? Grow your business so you can earn more money. An advance is a great financial tool that will enable you to grow your business.
Best Ways to Invest Your Advance
I know I’m beating a dead horse here, but when you take an advance, it is wise to invest the funds in things that will help you grow your career/business. Here are a few savvy ways I have seen other artists use advances:
New Projects – Advances give you the cash flow you need when you want produce a new record or buy equipment.
Tour Support – Planning to hit the road? You can use an advance to pay for the front end costs, such as production expenses, transportation/lodging, merch, etc.
Marketing & Publicity – You have great music! Now it is time to let people know you exist, or even better yet, buy your music or a ticket to your show. Investing in a social media campaign, digital content (videos, graphics, etc), and/or a publicist to solicit media exposure for you can truly take your career to the next level.
While I do not promote the use of advances to cover personal bills, because it can start a vicious cycle that is difficult to get out of, life happens. Understandably, there will be emergencies that come up where an advance could be helpful – Medical bills, rent/mortgage, school bills, etc. With the high interest rates on most credit cards (up to 30%, according to WalletHub), bank loans take time to process; you may find that obtaining an advance is the most economical and efficient way to handle your current situation.