Finance for music festivals

Over the past few years there has been a surge in the music festival sector, and it is now seen as a vibrant element of the leisure and hospitality industry. With costs continuing to rise for overseas holidays, many are preferring the staycation option which further helps the popularity of attending a live music event.

To visitors there are no negatives with a music festival, well unless of course the weather decides to take a turn for the worst. Everybody is there to enjoy the music, soak up the atmosphere and bask in all the fun that can be enjoyed.

However, for an organiser it can be a highly complex and incredibly time-consuming event. The biggest challenge though is having the right finances in place. When a decision is made to run a music festival there are some significant upfront costs that need to be accounted for. There will be booking fees required for both the venue and artists, costs for marketing and promotion, employment of staff (both full time and temporary) and equipment hire.

A high proportion of costs associated with the organisation of a music festival will occur during the start-up phase, which can often be months in advance of any revenue being generated through ticket sales. There will also need to be a buffer of cash available to the organiser to cover any unexpected, unaccounted for or unavoidable expenses.

This all means that an organiser must have a substantial level of capital when arranging a such an event. Fortunately, there are some excellent business finance options for music festivals which, when coupled with fees generated through event sponsors and advertising, means an event can run without financial issues. Profit is then made as soon as the sale of tickets can commence.

Funding solutions can include business loans, asset finance and invoice finance. There are however, some key items necessary to help with the application process:

• A compelling business plan which clearly outlines why the event will be successful.
• An upfront commitment from partners, sponsors and advertisers.
• Evidence of good credit history to show that past financial commitments have been maintained and monthly payments adhered to.
• Reliable collateral that can act as security for any funding obtained.

One final item to note is that events can be iconic on the scale of those such as Glastonbury and Reading Festival or they could just be local community events.

Not only can NGI Finance assist with providing a funding solution for the organisation of music festivals we can also help to finance soft assets which can attend these events. For example, we have worked with companies who have converted double decker buses into mini bars which attend events and invite festival goers to join them for a unique experience – most recently, and to prepare for the 2024 season, we facilitated a business loan for £70K. In a similar manner we have helped secure £30K of finance to convert a Citroen van in order to provide a mobile coffee solution and the company are now fully booked for this season’s festival period.

If you have any questions or would like to know more about finance for music festivals, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.