Funding a Comedy Show
Part 4: Savings Programs and Loans
Posted on 30 January 2012
I am starting with some caveats in this article. So please stick with me for a few paragraphs and we will get to the juicy “where do I sign” bits.
Many comedians just do not have access to granting money and may not have the time between work and/or family commitments to do a lot of fundraising. So the most seemingly straight-forward routes to funding a comedy show are to either save for it or apply for a loan.
I say “seemingly”. Banks have been making it harder and harder to save money. In fact they take in more money if you don’t. Often you will be given a choice between a personal loan and a credit card. The personal loan will have so many establishment requirements and fees that a credit card appears the better deal. Just remember, the bank can charge you more interest on a credit card and keep you trapped in an endless cycle of debt.
Yes, a few films have been made by people who have rounded up loans from their families, then obtained and maxed-out a $10,000 credit card. We often only hear that end of the story and see the results at a film festival. What we don’t hear about is if these people managed to repay their family and repay the credit card. Some have had to sell their houses. In which case I wonder, why didn’t they start with selling their house, rather than putting themselves in a position where they will never be trusted by a bank (or family member) again?
When I started a publishing business in the early 90s I applied for a bank loan to pay for the printing and marketing of a little handbook I thought would sell nicely and pave the way to more literary publications. I was young, this was my first business venture. When the bank told me I had the loan, I believed them before seeing the details. I started printing the work right-away. When I received the details, I discovered the bank had not okayed the loan. Instead they were giving me half of what I asked in the form of an overdraft on a credit card. Without money for marketing, the book didn’t do well enough for my publishing house to continue as a viable concern. I spent ten hard years paying back the bank. I’ve heard worse stories than my own.
Don’t fall into the credit card trap. It will make your life a misery, and truly you can succeed without it.
So, can we find any good news here…yes! But you and your ego have to not mind going to smaller institutions.
Term Accounts
A term account is a savings account where you agree to have your financial institution hold your money for a fixed amount of time. You can usually make unlimited deposits, just no or few withdrawals until the end of the term. These accounts then accrue interest (you make money) of anywhere between 1.25% to 6.0% per month. They usually require you begin with a minimum deposit such as $20,000. However, you can find accounts that start with a minimum deposit of $500 or less, provided you go to certain credit unions or some community banks such as Bendigo Bank.
If you are having difficulty with making a minimum deposit, you can always open a Christmas club account. These are only found at credit unions, building societies, and Bendigo Bank. They are basically term accounts that end the first of November, and you can withdraw money from the beginning of November to the end of January. This works out well for those saving for either the Adelaide Fringe Festival or the Melbourne International Comedy Festivals. Those are the months you will want to start spending money on poster photographs, venue deposits, and the like.
The advantages of these accounts is that you can compel yourself to save with automatic deposits, you can’t easily cheat and make an early withdrawal on money you were saving for a festival show or tour, and you make money. The disadvantage is that you will not have access to that money for an emergency without facing financial penalties. Infochoice is a good place to compare different savings programs and find where they are located.
Personal Loans and Microfinance
For personal loans your very best bet is to become a member of a community credit union. The sad thing is not many genuine community credit unions continue to exist. The global financial crisis changed the shape of Australian financial institutions. With new legislation to insure deposits came new regulations. Many credit unions have been forced to amalgamate in order to have the resources to meet these regulations. The now larger institutions are no longer as much of a community resource. Customers/shareholders lose much of their democratic control, their personal service, and transparency into what is being done with their money.
Melbourne is lucky in that we still have the Fitzroy Carlton Community Credit Cooperative (FCCCC). They have managed to avoid amalgamation due to the hard work of many volunteers. They have budget services, Christmas club accounts, and loans for members on low and fixed incomes. Usually, you can only receive a personal loan of over $2000 with most financial institutions. The FCCCC supports microfinance. You can ask for less than $2000. You will need to have been an active member of the FCCCC for three months and provide them with two payslips or a statement from Centrelink showing your entitlement to benefits. Their fees are low and they work with you to ensure that your repayments suit your budget.
The Fitzroy Carlton Community Credit Cooperative is located near a major performance district for both Melbourne Fringe and the Melbourne International Comedy Festivals. So, they are contemplating putting together savings and loans programs specifically for performers and artists. If you are interested, contact me and we can set up an information day with them.
For comedians nationally Foresters Community Finance is becoming an important resource for individual artists and arts groups. They are based in Queensland and primarily service people in that state, but have been accepting loan applications from people in other states. They have even been working with the Fitzroy Carlton Community Credit Cooperative.
They have loans for under $4000 for individual artists that can be used for producing, touring, and even training. They also have social enterprise loans that could be used by a comedian cooperative. The interest rates are not much different than those you would pay for a credit card, but you would have no establishment fees, no exit fees, and no early repayment fees. Repayment can be made within a few months up to three years.
Conclusions
Personally, I think you are better off saving money for your shows, rather than taking out a loan. However, events sometimes make that an important addition to your finances. You might be offered a spot at Edinburgh Fringe within the next three months, but will need to come up with the accomodation money yourself. Some production cost may blow out or you may have an unexpected medical expense eat up your savings. These things happen.
Of course even if you get a grant, investment money, or a loan, it’s still worth saving “just in case” money. If nothing else, you can use it for the after party.
Peace and kindness,
Katherine
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