British indie trade body AIM has announced a new initiative called AIM Start Up Loans, which will provide loans of up to £25k to people running new, independent music companies.

Unveiled today in London, the scheme is based on the British government’s Start Up Loans initiative, with AIM the first music industry body to become an official partner.

AIM’s scheme is open to British music companies that have been trading for less than a year, with interest fixed at 6% on the loans. Multiple founders from the same company can apply, and AIM will provide pre-application support as well as post-loan training, networking and mentorship.

The interesting thing about AIM Start Up Loans, though, is that it’s not just for independent music labels. CEO Alison Wenham told Music Ally that it will ultimately open up to other creative industries, and that music technology startups may also qualify for the loans.

“One of AIM’s first public campaigning platforms was access to finance. We realised that small companies, and particularly small companies in the music industry, had difficulty accessing finance,” she said.

“Music companies have very particular problems. Subjectivity pervades decision-making when it comes to music: issues like the nature of intellectual property in the balance sheet make it impossible for traditional bankers to evaluate these companies.”

Wenham criticised the last (Labour) government for its lack of action on this score, despite a “very solid” report quantifying the problem. “We worked with the Labour government for 10 years, and did nothing but reports for those 10 years,” she said.

“In the end, they called for another productivity survey! We thought we’d proved this beyond a reasonable doubt, but in the end I wilted on the vine, and sat back and looked more European-wide, lobbying with IMPALA to get European forms of funding.”

In the meantime, the successor Coalition government in the UK introduced the Start Up Loans initiative, which Wenham praised – “I don’t know how you’re going to say this without painting me as an arch-Conservative, but I voted Labour all my life!” – for introducing a clear, flexible and “well thought-through” system for providing loans to early-stage startups.

Under AIM’s scheme, business founders will apply, and receive training to become “investment-ready” before receiving the loans. AIM will convene a panel of independent company owners to “ask the searching questions, and flush out the confidence, stability, determination and passion of people who are applying” according to Wenham.

She said that AIM has already identified more than 30 suitable applicants, and that not all of them are indie labels. “We’re going to be servicing the creative industries,” she said. “I feel our levels of competence will take us to the edge of music and into those other industries, including the interfaces and technological platforms linking up expertise.”

Wenham said the scheme’s launch is recognition that while independent music companies may struggle to attract traditional forms of funding, many are shrewd, innovative entrepreneurs – in contrast to past portrayals of label bosses as well-intentioned but slightly shambolic business leaders.

“In the 1980s, people did fumble around and make it up as they went along, and it could often be quite a lonely, isolated experience without having a peer group around them. It’s massively confidence-building when you know you’re in a big community of people who not only share a solid common denominator with you – independence – but they also care about you and want you to succeed,” said Wenham.


“They believe in the diversity and benefits that small companies growing up bring to the whole industry. Successful independent companies don’t believe in pulling up the ladder behind them and kicking new market entrants down the cliff.”

She stressed that the mentoring aspect of AIM’s loans scheme is just as important as doling out the cash, promising that successful applicants will each have one-to-one access to a mentor hand-picked from AIM’s board and/or leading members.

“They’ll get quarterly business meetings, support on budgeting, cashflow and how to raise secondary finance, particularly focusing on grant applications. Once they’re underway, they’re going to get an awful lot of business training from us,” she said.

“That’s never been available free to anybody before at this level: they’ll be supported before, during and after the loan process. And even if something is going wrong with their business, we can have a good look at that as well.”

Digital is likely to loom large in the business plans of fledgeling independent labels, given the background of disruption not just to traditional physical sales, but also the transition from download sales to streaming access.

Wenham noted that for many indie labels, digital is a big opportunity. “In digital, the costs of setting up and going into the market are considerably less, and considerably less risky: there is no stock sitting around, and no distributors that might not pay you. Once you get three or four bands and position them correctly, you don’t need much money to get them going and be innovative in the digital space,” she said.

“Digital becomes a very reliable global income stream, once music is on the platforms, motoring away. And labels can be far more imaginative and innovative with digital engagement, feeling that they’re not completely clueless about where their bands’ fanbases are. You can become more sure-footed, and won’t suddenly implode because you make a single mistake.”

She also said independents stand to benefit from the growth in streaming, despite the ongoing industry debate over whether payouts from Spotify and other services will help artists and labels alike sustain their businesses.

“Spotify is a startup too. When that business scales, and the reach is global, two things will happen. One is that people will stop bitching about the streaming versus sales argument. It’s out there, and it isn’t going to go away,” said Wenham.

“Also, the rates will be adjusted. It will become more like a retail business, because it IS a substitution for retail. In time, the rates will be adjusted to look like retail. And in the meantime, independents are able to manage their overheads and costs to be in line with the emergent format.”

She noted that 10 years ago, AIM’s board was entirely made up of record labels, while now those board members’ companies are also active in areas including publishing, management, live and merchandise.

“Still, all of those activities are based around the core A&R role. You can take a nice big picture of Arctic Monkeys or Adele and stick it with this story as proof. They’re not militant, although they’ve been vocal, but you can see how comfortable they are with their record company,” she said.

“Last year, the independents had their best year for 10 years. The market is open. The independent sector has always been agile, pragmatic, adventurous and smart, and very close to the ground on A&R. In 2014, those are the ingredients for success if ever I heard them.”

Wenham also alluded to future announcements from AIM that will emphasise the role independent labels play in helping artists negotiate the choppy digital waters. “If I could ever wave a magic wand – and I am going to be waving a magic wand in June – it would differentiate the indie sector from the majors,” she said. “We regard artists as equals – partners – and we’re on that journey together.”

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