Creative Financing Feasibility Study 2011

Creative Financing:
feasibility study into

financial mechanisms for
supporting small-scale
creative activity in
Scotland
Shetland Arts with support from Mission Models
Money, Creative Scotland and Highlands and
Islands Enterprise
Final Report, January 2011
1. Executive Summary...........................................2
4.4.1 Demand for loans and market sizing estimates ............... 15

4.4.2 Support needs ................................................................. 17
2. Introduction and methodology ...........................4
4.4.3 Qualitative findings .......................................................... 17
2.1 Study Background ................................................................ 4
4.5 Supply side consultation ..................................................... 18
2.2 Study Objectives ................................................................... 4
5. Financial Modelling Outcomes ........................ 21
2.3 Methodology ......................................................................... 5
3. Key findings .......................................................6

3.1 Overview ............................................................................... 6
3.2 Level of demand ................................................................... 6
3.3 Nature of demand ................................................................. 7
3.4 Supply side outcomes ........................................................... 8
3.5 Financial Modelling outcomes .............................................. 8
6. Recommendations .......................................... 24
6.1 Recommendation 1: Work with existing credit unions to
provide services tailored to creative sector customers ............. 24
6.2 Recommendation 2: Pilot a publicly subsidised low
interest business loans scheme with business support ............ 25
6.3 Recommendation 3: Partner with crowdfunding sites to
provide project specific funding ................................................ 27
6.4 Competitor / collaborator analysis ...................................... 27
4. Detailed consultation and research findings ....10

4.1 Research outcomes overview ............................................. 10
7. List of Appendices ........................................... 29
4.2 Demand side workshop outcomes ...................................... 10

4.3 Online survey findings ........................................................ 14
4.4 Profile of respondents ......................................................... 14
1. Executive
Summary
The cultural and creative industries (CCIs)1 are currently navigating a
difficult period with reducing availability of public and private sector
funding both in the UK and internationally. As a consequence there is
an increasing interest in identifying additional means of supporting
creative businesses amongst creative sector funders and practitioners.
Through their work with local artists, Shetland Arts had long been aware
of the need for a mechanism, additional to existing grant financing,
through which to fund small scale creative activity. Shetland Arts
discussed the idea with other arts organisations who agreed the idea
was worthy of further investigation.
This feasibility study builds on an earlier briefing paper by Mission
Models Money (MMM) for Shetland Arts (see Appendix 6). It has been
undertaken with the support of time and funds from Highlands and
Islands Enterprise (HIE), Creative Scotland (CS then the Scottish Arts
Council) and MMM who were commissioned to oversee the study on
behalf of Shetland Arts. A steering group was formed to provide
additional support and guidance. A full list of steering group members
can be found in section 2.1.
The study concludes that there is a great deal of interest in loan-based
approaches to investing in the arts amongst Scottish creative
practitioners and their representative bodies. Loan-based approaches
have the potential to make a positive impact on the sustainability of sole
traders and small creative businesses, and more broadly on the

Scottish creative economy.
However, this interest does not translate into uniform demand for a
single type of service. Our research identifies three different types:
1.
Demand for small loans of less than 5,000, mostly for sole traders
wishing to make small investments and incremental improvements
to their practices and to ease short-term cash-flow problems
2.
Demand for larger loans of approximately 5-20,000 alongside

complementary business support for borrowers seeking to make a
significant investment in their practice
3.
Demand for loans of all sizes for discrete creative projects such as
musical recordings or films, for which no, or minimal, financial
repayment is required (similar to grant funding)
Creative Financing:
feasibility study into financial
mechanisms for supporting
small-scale creative activity
in Scotland
www.bop.co.uk
A single fund on its own is not a complete solution. The high cost of
servicing loans and the low interest rates that practitioners would be
prepared to pay would require substantial public investment to ensure
viability.
A multi-faceted approach is required to cater for the diversity and nature
of demand. This would include making use of existing providers as well
as the creation of new mechanisms.
Credit unions are a means by which small personal loans can be
extended to creative practitioners looking for additional financial support
as an alternative to the services provided by high street banks.
Under existing legislation, credit unions across Scotland could serve
creative industry customers within their respective geographical bonds2.
The DCMS recognises eleven creative industries. However, since some of the DCMS
sub-sectors were not considered part of the target audience by the project steering group,
seven sectors were selected for the study: visual arts, crafts, music, digital arts, performing
arts, publishing, design and illustration.
Credit unions are required to specify the common bond shared by their customer base.
The common bond can relate to those working for the same company, in the same sector
or in the same geographical area. Credit unions currently are allowed to have only one
common bond but changing legislation will allow them to hold multiple common bonds.
Pending changes to legislation will enable credit unions to add

additional common bonds and serve creative industry customers across
Scotland. This research reveals interest amongst consulted credit
unions in extending their services to the creative sector under both
existing and future legislation.
Existing social finance institutions can serve the opposite end of the
spectrum, with several such organisations already providing larger
loans of 15,000 and more to a range of cultural organisations.
also have the opportunity to raise funds in this way. Some

crowdfunding sites are primarily philanthropic in nature and these may
warrant further exploration.
Figure 1 (below) summarises the conclusions of this report, matching
the most appropriate solution to each type of demand identified. Greater
detail on the research and analysis driving the recommendations can be
found in section 6.
Creative Financing:
in Scotland
www.bop.co.uk
Figure 1: Identified demand and matching recommendations:

However, there appears to be a gap in supply for low-interest loans of
between approximately 5-25,000. There is a case for setting up a
subsidised fund for this segment of the market. Such subsidy would
ensure that interest rates could be kept low in order to meet demand
and to make a significant investment in the cultural sector.
If subsidy can be secured, the fund could be delivered either in
partnership with an existing social investor or with a bank. Both options
would require subsidy, although a partnership with a bank could negate
the need for a large up-front investment, limiting the subsidy to the
payment of interest on loans issued.
Consultation with creative practitioners and their member organisations
also revealed a strong need for practitioners to improve their business
skills, particularly in the areas of business planning, finance and
marketing. Business support would be necessary to help practitioners
making applications to the new fund, and investing awarded loans
wisely. This support could be delivered by existing providers.
Lastly, crowdsourcing is a mechanism of peer-to-peer financing with the
potential to meet the demand for project specific funding that does not
require repayment in financial terms. Existing websites could meet this
demand and bodies representing Scottish artists could partner with
these sites to supply a steady stream of projects.
Should the commercial requirements of existing crowdfunding sites lead
them to select only larger projects to promote on their sites, there could
be a case for a publicly subsidised site to ensure that smaller projects
Type of
demand
Loan
size
Recommendation
Small loans
primarily for
individuals and sole
traders seeking to
make small
investments or aid
cashflow
Medium size loans
with business
support for sole
traders and
organisations
wishing to make a
significant business
investment in their
practice
Project specific
funding to
complement
existing grants
0-5k
Work with existing credit unions to develop

a creative industries specific service for
sole traders in the creative sector.
See section 6.1 and sections 3.2, 3.3 and
3.4 for relevant research and analysis.
5k+
All
Loan funding delivered either in

conjunction with a banking partner or a
social investor. A publicly subsidised pilot
providing business loans and training to
drive growth in creative businesses would
clarify demand and benefits.
See section 6.2 and sections 3.2, 3.3 and
3.4.1 and 3.5.
Partner with crowd-funding sites to
maximise opportunities for Scottish
projects. Consider developing a new site /
service for small projects based on social
business principles.
See section 6.3 and section 3.5.
2. Introduction and
methodology
2.1 Study Background
Through their work with local artists, Shetland Arts had been aware for
some time of the need for a new mechanism through which to fund
small scale creative activity. Examples of this need included a painter
who lacked the funds to frame pictures for sale and a double bass
player who needed new strings to play concerts. Based on these
findings, Shetland Arts developed a proposition for a new mechanism to
support this type of activity and MMM supported this process by
producing a briefing concerning possible structures for this mechanism
(Appendix E).
Further consultation with representatives of other key cultural sector
players including Hi-Arts, Visual Arts and Galleries Association and
Highlands and Islands Enterprise resulted in a consensus that new
ways of financing small scale creative activity, additional to existing
grant funding opportunities, were desired by both artists and their
representative bodies. This feasibility study was then conceived by
Shetland Arts with the support of time and funds from Highlands and
Island Enterprise, Creative Scotland (then the Scottish Arts Council)
and Mission Models Money (MMM), who were commissioned to
oversee the study on behalf of Shetland Arts.
At the outset of the study, and as identified by MMM in their briefing
paper for Shetland Arts, the most appropriate mechanisms for meeting
identified demand were considered to be a credit union, a Community
Development Finance Institution (CDFI a legal form commonly taken
by social investment organisations) or a peer-to-peer funding model
which enables private individuals to directly finance creative projects.
The study focused on creative practitioners and creative microenterprises of five people or less (sometimes referred to as the target
group), and small loans within a range of 100 to 5,000 were regarded
as the most appropriate for meeting their needs.
In addition to the commissioning group, a steering group was also
formed to provide additional input. The steering group members for the
project were as follows:
Creative Financing:
in Scotland
www.bop.co.uk
Shetland Arts Development Agency

Dundee Contemporary Arts
Federation of Scottish Theatre
Hi-Arts
MMM
Scottish Artists Union
Creative Scotland (Scottish Arts Council at project inception)
Visual Arts and Galleries Association
Wasps Artist Studios
2.2 Study Objectives

This study was commissioned to build on previous research, and to
examine the feasibility of establishing a new mechanism to finance
small-scale creative activity in Scotland as well as to produce
recommendations concerning what such a fund might look like, and how
it could be managed.
The specific proposition was for a fund with an arts brand and with loan
book management delivered by an existing specialist organisation
managing other similar funds. Loans were expected to fall within a
range of 100 to 5,000.
It was assumed that the loan-book for the fund would most likely be
managed by an existing specialist institution. A distinct arts brand for
the fund was considered preferable in order to attract the target market.
2.3 Methodology
In addition to an on-going review of relevant literature and presentation
of findings, the following key methodological steps were taken:
1.
Consultation workshops with arts member organisations

in Scotland. Three workshops took place, one each in
Glasgow, Dundee and Inverness, attracting a total of 27
participants. The purpose of the workshops was to discuss the
financing needs of Scottish creative practitioners and microenterprises and gauge demand for the proposition. A full list of
consultee organisations can be found in section 4.2 of this
report. Following the consultation, participants supported the
distribution of the online survey of creative practitioners and
micro-enterprises by circulating the survey amongst their
respective members.
2.
Online survey of creative practitioners and microenterprises: the survey of creative practitioners attracted 336
responses from a range of sectors and geographies. Full
survey findings can be found in appendices A, B and C. The
survey results drove the market sizing and financial modelling
steps of the methodology.
3.
Financial modelling: Financial modelling of a loan fund

managed by an existing provider was conducted by project
partners DSL, a specialist social investment organisation
operating in Glasgow. The financial model showed the possible
performance of a standalone fund, the effect of altering
variables such as interest rates, and loan term. A break-even
model was also created. The full financial model can be found
in Appendix D
4.
Supply side consultation: individuals working for public and

privately funded organisations were consulted to gather
perspective on the viability of the proposition and to begin to
identify who might support and manage a fund. Consultees
included social investment organisations, representatives from
cultural sector bodies, credit unions in the UK and Canada and

a crowd-funding website.
Creative Financing:
in Scotland
www.bop.co.uk
3. Key findings
3.1 Overview
In order to gauge the feasibility of the proposition, information about the
finance-related needs of creative practitioners and micro-organisations
was collected via a series of three consultation workshops held in
Glasgow, Dundee and Inverness reaching 27 participants, and an
online survey receiving 336 responses. The workshop participants were
representatives of arts member organisations such as Scottish Potters,
the Musicians Union and the Visual Arts and Galleries Association while
the online survey respondents were the target group of creative
practitioners and micro-organisations themselves.
Approximately half (47%) of on-line survey respondents stated that they
work part-time as creative practitioners and the majority (65%) generate
less than 10,000 a year in revenue through their creative practice. Low
revenues mean that many consultees require additional sources of
income to supplement their creative work and a significant proportion
(40%) state that they cross-subsidise their creative practice with income
from another job. Many also draw on personal savings (43%) or support
from family and friends (28%).
While the study is targeted at creative practitioners and micro
organisations, most respondents work as individuals at least part of the
time, with 85% registered as sole traders. Only 4% of respondents
worked solely for organisations of two or more people. In terms of
creative sub-sectors, the majority of respondents came from the Visual
Arts, although the Crafts, Music, Publishing and Literature, Design and
Illustration and the Performing Arts were also well represented. Greater
detail on the demographic profile of respondents can be found in
section 4.4.
The consultation outcomes include insights into the level of demand, the
nature of that demand, supply side issues and the outcomes of the
financial modelling exercise.
3.2 Level of demand

A key outcome of this study is that there appears to be significant
interest amongst consultees in a fund providing small loans to creative
practitioners and micro-organisations at either a low or zero interest
rate. Market sizing estimates drawing on the outcomes of the online
survey show that around 9,000 creative practitioners and micro
organisations across Scotland could be interested in borrowing from
such a scheme3.
Creative Financing:
in Scotland
www.bop.co.uk
If delivered with accompanying business skills training and support, the

view of many consultees is that a loan fund targeted at creative
practitioners and micro-organisations could increase levels of
investment in the sector, helping many in the target group to become
more economically sustainable. Achieving economic sustainability is
considered a particular priority for many creative sector businesses. It is
also thought that some creative businesses with significant growth
potential are currently overlooked by existing providers of loans, and
that a creative industries sector loan-scheme could address this
problem.
Most consultees also emphasise that loans should complement or
supplement the existing supply of grants rather than be offered as a
replacement since grants and loans fulfil very different functions. Loans
are a means to invest in creative opportunities which stand a good
chance of generating cash returns. Many consultees state that loans
should not be offered as a replacement for grants since much work
currently supported by grants does not hold sufficient revenue
generating potential to ensure repayment of a loan but rather offer nonfinancial returns on investment. There is also some concern that a loan
scheme, if poorly implemented, could increase levels of unwanted and
debilitating debt in the sector.
2. The figure of 9,000 is derived from market sizing estimates suggesting a total market of
approximately 17,500 creative practitioners and small organisations and the fact that 52%
of those surveyed as part of this research stated an interest in taking out loans.
A list of 121 qualitative statements left by consulted creative

practitioners expressing their views on the pros and cons of a loan
scheme can be found in Appendix B. The majority of responses are
supportive of the idea, although many are cautious and a few are
strongly critical, emphasising the dangers presented by debt. Many also
emphasise the need for low interest rates in order for any fund to be
attractive to the sector.
to take out a loan drops off sharply for higher interest rates, with
approximately half of all respondents still strongly attracted by rates of
5-10% but almost no-one by rates of 10-15%.
Creative Financing:
in Scotland
Figure 2: Size of loan required by consultees
www.bop.co.uk
3.3 Nature of demand

While there appears to be substantial demand for loans as an additional
form of financing creative activity, Scottish creative practitioners and
organisations appear to have a variety of finance related needs. There
is also considerable variation in terms of the size of loan required as
well as in the nature of the proposed investment.
For example, while most respondents (66%) were interested in taking
out small loans of less than 5,000, a significant proportion (20%) were
interested in sums of 5-10,000 and a further 13% in sums larger than
10,000. Only one of the consultees working for an organisation of two
or more people consulted via the online survey stated a need for loan
financing of less than 5,000. This indicates that there is unlikely to be
demand amongst this group for smaller loans. Figure 2 shows the level
of demand for different sizes of loan for the different groups consulted.
The finding concerning the size of loan required supports the outcomes
of the consultation sessions, where participants stated that while some
artists would require only small sums in order to make small
investments or to ease short-term cash-flow problems, others would
require much larger sums to invest with the aim of achieving significant
increases in revenue and profit.
Demand for loans appears to be contingent on very low interest rates
with the great majority of respondents (84%) stating that they would be
very interested4 in borrowing at interest rates of just 0-5%. Willingness
For the purposes of this study, very interested is a score of 8 or 9 on a scale of 10
Workshop consultees and online survey respondents cited a range of

uses for loan funding including capital investment in equipment and
property, purchase of materials and inventory, payment of production
and marketing costs, and cash flow items such as payment of living
costs. The following seven quotes are examples of loan use left by
online survey respondents. The full list of 118 responses can be found
in Appendix C.
I could have a screen print washing unit fitted in my open studio
which would allow both myself and my daughter who shares
the studio to save on time and print costs [and improve] our
artistic control.
I would invest the money in recording collaborations centred
around my record label which when released and sold would
provide financial return for both the label and the artists (of
which I count myself).
I could pay to buy improved lighting so I could upscale my

portfolio/client base.
As above, I need to prepare pieces for framing etc for an
exhibition in September 2011.
I could pay to have my pictures framed which would enable me
to have an exhibition and I could pay for any promotional
material posters etc.
I would spend some time without a part-time job to dedicate all
my time and energy on an exhibition and buy the tools and
materials relevant to do a good job, plus good publicity for it.
It could sustain me while I write another book, and until monies
from the previous ones come in - this could be particularly
important in the case of emergency outlay, such as vehicle
breakdown & repurchase (which I envisage in the not-toodistant future!).
3.4 Supply side outcomes

In addition to the workshops and the online survey, a series of meetings
and calls were conducted with the representatives of organisations with
the potential to support the financing or the management of the
proposed loan scheme.
Of those consulted, publicly funded cultural sector bodies including
Creative Scotland and the Culture directorate of the Scottish
Government are the parties best positioned to provide the necessary
funding to establish a loan scheme. A loan scheme is potentially in-line
with the economic sustainability, cultural and tourism objectives of these
bodies. Commercial business investment in a loan scheme is less likely
to be forthcoming since the fund would be unlikely to generate a
financial return on investment although fund raising from private
individual, trusts and foundations is an option that should be explored
further.
Perspectives gathered concerning the proposed schemes viability

revealed support for the idea in concept, although consulted expert
social investors stated that loans of approximately 5,000 were much
smaller than they traditionally handled. As a percentage of the sum lent
small loans tend to incur very high costs relating to processing the loan
and bad debt recovery. As a result, supply side consultees tended to
see the proposition as one that would lose money over time and which
requires an investor prepared to acknowledge that probability.
Creative Financing:
in Scotland
www.bop.co.uk
Many social investors already cater for creative sector businesses to a

certain extent. For example, the Charity Bank, DSL and Triodos have all
provided loans to creative sector companies, although the sums lent
tend to be larger than those within scope of this study. Loan recipients
also tend to be registered companies or charities, rather than sole
traders who form the main target group of this study. However,
consulted fund managers all stated that they would be potentially
interested in managing a loan fund should one be created and wished
to be kept informed of plans.
Existing precedents of alternative means of financing creative activity
were investigated as part of this study. These included credit unions for
providing financial services to creative sector workers, crowd-funding as
a means of financing discrete creative projects and a partnership
between a public body and a bank as a way of delivering small loans for
the creative sector. These precedents informed the recommendations
for this study and the outcome of our consultation with related parties is
contained within each recommendation.
3.5 Financial Modelling outcomes

In order to demonstrate the potential financial performance of a fund
providing small loans to Scottish creative practitioners and microenterprises, social investment experts DSL drew on specialist
knowledge and the outcomes of the online survey in order to create a
financial model. The financial model assumed an initial investment of
2m, conservative rates of customer acquisition and default, and that
the fund would be managed by an existing social investment
organisation. In line with the survey outcomes and the requirements of
the brief, an average loan of 5,000 was assumed and the cost of
providing business support was not included in the model.
The main outcome of the model is that the fund would steadily lose
money over time unless interest rates of 28% or more could be
charged. As shown in Figure 3, at lower interest rates of 5% and 10%,
the model showed a balance sheet deficit of approximately 430,000
and 350,000 respectively after five years.
Creative Financing:
in Scotland
www.bop.co.uk
Figure 3: Impact of varying interest rate and loan term on 5yr P&L
Impact of varying interest rate and loan term on 5 year p&l
2 year loan
3 year loan
5% Interest rate
-427,000
-407,000
10% Interest rate
-351,000
-305,000
Perhaps reflecting access to conventional forms of finance, consultees
and survey respondents stated that they would only be interested in
borrowing at low interest rates of 0-10%. Given the high rate of interest
required for a sustainable fund (~28%) it appears unlikely that such a
fund would attract sufficient custom to break even.
The results of the financial modelling exercise are in keeping with the
outcomes of the consultation with existing suppliers of finance including
public and private sector investors who expressed a degree of
scepticism about the commercial viability of providing small loans to the
target group. The main reason that the fund makes a loss is because
the average loan size is quite small. It is for this reason that existing
social investors tend to lend much larger sums. For example,
Venturesome restrict loans to a 30,000 minimum.
However, the fact that the proposed fund looks likely to lose money over
time does not mean that it is inherently unviable. Rather, it shows that
investors need to be sought who are prepared to accept social and
cultural returns in place of financial returns.
4. Detailed
consultation and
research findings
4.1 Research outcomes overview
A key outcome is that there does appear to be demand amongst
Scottish creative practitioners and micro-enterprises for small loans
specifically for this group. This came through as a strong outcome of
our consultation workshops, with a further 52% of survey respondents
stating they would be interested in taking out a loan if such a fund
existed5. Most of those consulted felt strongly that any loans introduced
should complement, and not replace, the existing supply of grants.
The consultation identified that the target group regard existing
(commercial) financial services as poorly equipped to deal with creative
sector customers. It also revealed that the majority earn relatively little
from their creative practices, with over 64% stating that they earn only
0-10,000. Reflecting the low income generated by their creative work,
44% stated that they cross-subsidised their creative practice from other
jobs. However, despite a low income, creative practitioners and microenterprises do not appear to be a financially excluded group, with most
reporting good access to bank accounts, overdrafts and credit cards.
Provisional market sizing calculations suggest a potential target market
of just over 16,000, with an interested market of just over 8,000 across
Scotland. On average, demand for loans was at the top end of the
scope of this brief, at approximately 5,000, although there was a great
range of responses. Demand for smaller loans was high, with 31% of
Demand side consultation was via workshops with member organisations in Glasgow,
Dundee and Inverness, and an online survey of their members which yielded 336
responses.
respondents stating a need for 1-3,000. Conversely, 20% of

respondents stated a need for 5-10,000, and 13% for a sum greater
than 10,000.
Creative Financing:
in Scotland
4.2 Demand side workshop outcomes
www.bop.co.uk
The purpose of the workshops was to engage with organisations across

Scotland that represent artists and could provide a top level view of their
finance and business support needs.
Workshops were held in the Briggait in Glasgow, Dundee Contemporary
Arts in Dundee and Hi-Arts in Inverness, with an average of nine
attendees at each session. The list of organisations represented at the
sessions is shown below in figure 4. In some cases several people from
the same organisations attended.
The workshops were structured around group discussions of the
following four questions:
1.
What type of projects do artists currently use loan funds for?

What type of projects could they use loan funds to finance?
2.
How do artists currently fund work and what is the mix of

funding types (e.g. loans, grants, revenue generation, cross
subsidisation)? What are the issues / problems with current
funding methods available in Scotland?
3.
What other types of help and support do artists need to make

their businesses financially successful?
4.
What do you think of the idea to establish a not-for-profit microfinance fund especially for creative businesses? What should it
look like?
Workshop attendees also supported the on-line research process

through inputting to the drafting of the questionnaire to ensure that it
10
was suitable for a creative industry audience, and then helping to

distribute it to their membership base. BOP Consulting would like to
thank everyone who attended the consultation workshops for their time
and valuable input.
difficulties, though many felt that these cases were less appropriate for
loan style financing.
Examples given by workshop participants of possible investments
included:
Creative Financing:
in Scotland
www.bop.co.uk
Figure 4: Workshop attendees
Creative Financing Workshop Attendees
Loans to cover small capital projects such as studio

conversions and purchase of expensive machinery such as a
kiln.
Putting on events such as concerts and exhibitions in situations

where costs were incurred before income was realised.
Examples of expense included staff hire, venue hire, payment
of artists and the cost of travel and accommodation.
Materials for commissions. Consultees stated that when

commissioned to undertake a piece of work such as a
sculpture, painting or a mural, the payment, or a large
percentage of the payment, was often only received upon
completion of the project. A loan could be used to pay for the
upfront cost of materials.
Training and CPD. Consultees stated that training and CPD

were often not undertaken due to the expense, even though
certain types of training relating to the development of business
skills and of professional skills could lead to increased
opportunities to earn income. It was considered that lack of
time was also a major barrier.
Costs of attendance at trade shows. Similar to putting on

events, crafts representatives suggested that trade shows were
good opportunities to display and sell work. However, the cost
associated with this could be prohibitive for a speculative
venture.
Production costs for an album. Loans could be used for studio

hire, production of artwork, post-production etc. However, it
Cultural Enterprise Office

Visual Arts and Galleries Association (VAGA)
Musicians Union
Glasgow Life
Ironbratz
Scottish Artists Union
Central Station
Glasgow Life
Scottish Potters
Fife Contemporary Arts and Crafts
Scottish Book Trust
White Space / Abertay
Wasps artist studio rep Dundee
Cultural Enterprise Offices
Dundee City Council Economic Development
Visual Arts Sutherland
Go North
Highlands and Islands Enterprise
Hi-Arts
Dog Star
Highland Opportunity
Highland and Islands Social Enterprise Zone (HISEZ)
Shetland Arts
Types of projects appropriate for loan style funding, existing and

hypothetical
The examples of how loans could be used to finance creative practices
put forward at workshops included some hypothetical situations and
some drawn from experience. Consultees suggested that loans could
be used to make a variety of capital investments or to assist cash flow
11
Creative Financing:
in Scotland
was acknowledged that investing in self production is risky as

commercial success can be hard to predict.
Self-publishing. Similar to producing an album, self publishing

is an attractive option for some authors. Again, commercial
success can be hard to predict and so investment is risky.
Replacing damaged equipment and machinery. In some cases

it can take time for insurance claims to be processed. In these
cases a loan could provide the means to replace the equipment
immediately.
IT equipment was cited as a priority for many. Computers,

specialist software such as Adobe writer and Sibelius can be
expensive yet essential tools for running a successful creative
business.
Marketing materials. Many consultees felt that marketing and

PR tools such as websites were increasingly becoming
essential tools. High quality photographs can help market
products to customers as well as shops, competitions and
exhibitions.
The above list is not exhaustive, but it shows the breadth of projects
that could require funding. Respondents to the online survey were also
asked for specific examples of what they could use loans for.
Responses are listed in Appendix B.
www.bop.co.uk
How artists currently fund work and problems with existing

mechanisms
Workshop participants emphasised that creative practitioners tend to be
a low income group, and that they often have multiple revenue streams,
with income coming from a mixture of group projects, education work,
commissions, sales of work and via second jobs.
In terms of financial support for investing and sustaining their creative
practices, consultees stated that creative practitioners operating as sole
traders tend to have normal access to personal financial services such
as bank accounts, overdrafts and credit cards.
In addition to these services participants mentioned that additional
investment can come from friends and family, grants and business
support mechanisms such as the Princes Scottish Youth Business
Trust. Many also mentioned that bartering and skills sharing were
common ways in which artists could attract non-cash investment and
support (e.g. a painting in exchange for accounting services).
Problems with existing commercial finance structures were cited as
being a lack of understanding of creative businesses on the part of
banks, leading to a tendency for applications for business loans being
12
Creative Financing:
in Scotland
declined. It was acknowledged that this was often connected with poor
business planning on the part of applicants. Due to the unusual nature
of arts businesses, Business Gateway was seen as being an unsuitable
means of providing business support. The Cultural Enterprise Office
were considered useful and well known but it was thought that greater
promotion could further boost take up of their services. The CEOs seem
better known to some sectors of the creative industries than others,
being particularly known among the Visual Arts sector.
www.bop.co.uk
Many expressed concern about the possibility that grant funding could
be reduced in the future due to a shortage of public funds.
Business support needs
The clear consensus of the study was that creative practitioners were in
great need of improved business skills. Many suggested that partly due
to their personal artistic goals, artists were averse to focusing on sales
and marketing and also less concerned with making the numbers add
up than people working in many other sectors.
The key areas identified as those in which artists lack skills are listed
below. The findings in this area drove the options for the survey
question on this subject.
Finance and accounting skills

Business planning and making credible applications
Sales and marketing skills
Knowledge of business and finance software packages such as
Excel
Presentation skills including public speaking
Developing relationships and networking with organisations
who can help artists to find customers, for example:
o Bookshops / cafes
o Craft fairs
o Libraries
o International galleries
o Arts and music festivals
Specific support for a creative sector micro finance fund, and

thoughts on implementation
Overall, workshop participants were strongly in support of the
proposition of a micro-finance fund that provided small loans to artists.
However, participants also stated that the following were likely to be
important aspects of a successful scheme:
Low interest rates in order to be competitive with other types of

financial services
A broad range of arts-sub sectors should be catered for
An arts friendly brand that spoke directly to the needs of artists
The fund should be ethical, meaning that profits should be reinvested, and that the source of funds should be ethical
Appropriate criteria that meant that loans were distributed only
to those that would invest wisely, thus avoiding creation of debt
Business support from people who understand the creative
industries and recognise opportunity within the sector.
It was also hoped that a fund would bring in new sources of investment
including private giving and philanthropy.
13
4.3 Online survey findings
Figure 5: Geographical break down of online survey responses
The purpose of the online survey was to learn more about the finance
and business support needs of creative practitioners and microenterprises directly from them. The information allowed us to estimate
possible levels of demand and build a picture of the type of people and
organisations who might be interested in borrowing.
Creative Financing:
in Scotland
www.bop.co.uk
Much time was taken to ensure that the survey, although asking about
financial and business issues was worded in a way that would be
accessible to creative sector respondents. Every effort was taken to
avoid jargon and use plain English. The full questionnaire with
responses can be found in Appendix A.
The survey was distributed with the support of those arts organisations
that participated in the consultation workshops. These organisations
sent the survey directly to their members by featuring the link on their
web pages or circulating it in their newsletters. In total, we received 336
responses to the survey and nearly all respondents fell within the scope
of the study only 1.5% (5 respondents) worked for organisations of
more than five people.
Further, although (as expected) the highest number of responses came
from Glasgow and the Clyde Valley and Edinburgh and Lothians, which
combined to contribute 57% of the total, all other areas were
represented to some degree, as Figure 5 (below) shows.
It should be noted that some of the questions allowed for multiple
responses and this accounts for the over 100% response rates in some
sections of the survey.
4.4 Profile of respondents

The results of the online survey provided useful learning about the type
of people and organisations in the target group. The findings paint a
picture of a low-income group who are engaged in a wide range of
activities to make a living.
At 85% the vast majority of respondents are self employed, working
either as individuals (66% of the total) or as individuals AND as part of a
collective (26%). In keeping with this finding, 84.9% were registered as
self employed, and 8.7% as a Limited Company.
In terms of the stage of development of the companies, the great
majority (87%) were established organisations, with 16% operating for
1-3 years, and 71% for more than three years.
As shown in Figure 6, wages earned by respondents directly from their
creative practices were low, with an average income of approximately
14
12.5k and 64% of all respondents earning 0-10,000. This compares

with a national average wage of approximately 23.500. This finding is
particularly striking given the suggestion that many artists, like other low
income groups, might have a tendency to over state their earning in a
survey such as this. However, this is also balanced by the fact that
44% say they cross-subsidise their creative practice with income from
another job (respondents were asked to discount income earned
outside the creative sector).
Figure 6: Yearly income from creative practices
4.4.1 Demand for loans and market sizing estimates

As a way of evaluating the potential demand for loans, respondents
were asked a series of questions about their likely interest in taking out
a loan, the sum of money they would require and what they think they
would spend the money on. These findings drove the market sizing
exercise and in turn the financial model.
Creative Financing:
in Scotland
www.bop.co.uk
Of the 52% of respondents who were interested in taking out a loan, the
average sum required was approximately 5,000. However, as shown
in Figure 7, there was considerable variation in terms of the amount
required. 67% of respondents were interested in sums of less than
5,000, while 33%, were interested in loans of greater than 5,000. This
variation most likely shows the range of ambitions of respondents (high
growth versus maintaining the existing level of income) as well as the
variety of ways in which the money would be spent. It is notable that of
the respondents from organisations of two or more people only almost
all stated a need for a sum in excess of 5,000.
The purpose to which respondents expected to put loans were wideranging, with a variety of cash-flow items and capital investments cited.
Many also selected multiple items, suggesting they had many ideas for
investments. For example, 59% stated that they would buy equipment
or machinery, 47% would purchase materials and 37.5% would use it
for research and development time.
The results also demonstrated that most respondents were

inexperienced borrowers, with 76% stating that they had never
borrowed money to invest in their creative practices before. With only
6% stating they have been declined for a loan in the past, it seems that
the lack of borrowing reflects the ambition of most respondents to
achieve sustainability / reduce dependence on subsidy, rather than
invest in their own growth.
In terms of interest rate, the results were clearer, with 80% of

respondents stating that they were very interested in borrowing at 05%6, 20% very interested at an interest rate of 5-10% but only 0.8%
stating they were very interested at a rate of 10-15%.
In order to reach a view on the available market for a loan fund, the
research findings were used in combination with research into the total
number of people working in the Scottish creative economy, across all
sectors and in all sizes of organisation7.
In this case very interested means that respondents have stated their interest in
borrowing as 10 out of 10.
7
Creative Choices Marketing Sizing and Demographics research 2008
15
Figure 7: Size of loan required by consultees
Figure 8: market sizing calculations
Market Sizing Estimates

Total creative industries
employment (Creative Choices
research)
% of population self employed
(Creative Choices research 2008)
% Sample self employed (BOP
research 2010)
Number of creative practitioners in
Scotland within study scope
% of sample interested in taking
out a loan
Total potential 'interested
market'
The existing market research estimated the total number of creative

sector employees in Scotland to be approximately 45,420, with 33% of
those self employed. This total was matched against the findings from
the survey where 85% stated they were self employed. Adjusting the
45,420 to the same proportions of self employed people in the sample
gives a target market of approximately 17,600. Adjusting this total in
turn to take into account the percentage of respondents who stated that
they would be interested in taking out a loan leaves a total interested
market of just over 9,000.
Creative Financing:
in Scotland
45,420
www.bop.co.uk
33%
85%
17,634
52%
9,169
The figure of 45,420 quoted in the existing research was also broken
down into sub-sectors such as visual arts, crafts and music. Adjusting
the employment figures for each sub-sector in the same way as the total
figure, and adjusting these further for the percentage of each group
which stated they were interested in taking out a loan (this ranged from
35% through to 77%) shows an estimated market sizing for each subsector.
It shows that, purely in terms of numbers, the potentially largest markets
for loans are design and illustration, music, crafts and the digital arts.
However, it should be noted that the original Creative Choices research
only has a design category for the purposes of the below calculation
this was divided into digital arts and design & illustration on the
assumption that both were equally represented within this category.
It should of course be remembered that since the above market sizing
calculations are based on a series of estimates and assumptions, the
results should be treated as indicative. However, the methodology is
sound, and is a useful reference point which can be used to sense
check and inform future findings, estimates and studies.
16
4.4.3 Qualitative findings

Figure 9: break down of market by sub-sector
Interested market by sub-sector
Sector
Visual arts
Total in-scope market (Creative

Choices research)
Percentage of sample interested
in loans (BOP Research)
Total in-scope market interested
in loans
Crafts
Music
Digital Performing Publishing Design and

Arts
arts
illustration
1,058
2,116
2,469
2,910
2,733
1,411
2,733
54.1%
72.6%
59.3%
61.9%
35.0%
45.0%
76.9%
572
1,536
1,464
1,801
957
635
2,102
4.4.2 Support needs

The survey also asked questions about respondents business support
needs, in part because the area had been much discussed during the
consultation phase.
While 23% of respondents did cite lack of business support as a major
problem for growing and sustaining their creative practices, limited
routes to market (56%) and lack of accessible cash (58%) were also
viewed as major barriers. However, this result is put in context by the
outcomes of the proceeding workshops where a lack of simple business
skills were perceived to be a significant problem for artists by the
consulted arts member organisations and creative practitioners alike.
When asked in which areas they particularly lacked business related
skills, respondents most commonly stated that legal issues / copyright
(52%), finance and accounting (46%), finding routes to market (41%)
and business planning (33%) were the areas in greatest need of
attention.
In terms of actively seeking out advice on financial matters, over half of
respondents (54%) stated that they would turn to a friend or family
member for information. While 38% would search online, 37.5% also
stated that they would approach a Cultural Enterprise Office (CEO) for
advice, suggesting that the CEOs are a known and trusted source of
information within the creative community. This compares well with
Business Gateway, which 28% stated they would contact.
After the online survey had been published, BOP Consulting was
contacted by a respondent who stated that the opportunity should exist
within the survey to leave unrestricted comments on what they thought
about the idea of using loans to invest in creative activity. The context
for the request was concern voiced by steering group members and
consultees alike that providing loans for artists had the potential to
create unwanted and damaging debt if loans were introduced without
appropriate criteria for awarding them and guidance for investing them.
Creative Financing:
in Scotland
www.bop.co.uk
A new comments box was introduced to the online survey one week
into the four week consultation window, leaving sufficient time for 112
respondents to write comments about what they thought of the
proposition.
The results were varied, with the majority of respondents showing
strong support for the idea of loans, but many also urging caution,
stating that any scheme would need to be carefully implemented with
appropriate selection criteria, flexible repayment terms and low interest
rates so as not to create unwanted debt. A small number of
respondents were strongly critical of the idea, voicing concern that loans
have the potential to create harmful debt, and that the introduction of a
loan scheme would be used as justification for reducing the level of
grant funding.
The following quotes are the first ten comments left by respondents. A
full list of all 112 qualitative responses can be found in Appendix B.
Yes, as long as the interest rate is reasonable and flexible
according to the organisation's needs and the profits put back
into future loans for creative purposes.
Debt is unwise. Income doesn't increase with age, experience,
acclaim or critical success. It's as likely to drop. So repayment
of loans would be an additional, highly stressful burden.
17
The highlands as a place to live as an artist creates a space

where you have all the inspiration and drive but no outlets for
work and no funds for materials. A fertile environment if one
can apply for funding. It is a good idea, as the financial rewards
are great.
The issue is the lack of councils and business organisation to
recognise arts are a valuable commodity to help investments in
while also targeting mature people in this sector, and
encourage more grants for the 30 + bracket
I think it is a good idea, as long as the interest and pay back

times are reasonable and generous and well checked (i.e. that
you will be able to pay them back).
The Small Business Finance (Dundee) Ltd has a great model
for loans run through the Business Gateway in Dundee. We
have accessed that but find there is very little else out there!
The outcomes of the supply side consultation were twofold. Firstly,

engaging with a range of organisations experienced at investing in the
social and cultural sectors provided information and data concerning the
mechanics of social investment and existing precedents to benchmark
our findings. These outputs are evident in the analysis behind the
recommendations.
I think it's a fantastic idea. The problem with recording music is

that fewer labels are paying an advance, therefore it's
becoming more and more difficult to raise initial funds to begin
the process.
The consultees included representatives of the following organisations

(in many cases multiple interviews were conducted):
Yes we would [be interested]. We have just rented a studio at

Meadowbank which costs 148 a month and which [we] have
to pay using sickness benefits..
www.bop.co.uk
4.5 Supply side consultation
I think it's a great idea, with an experienced person/s judging

the need and ensuring the money is being spent wisely, and
can be repaid easily. I am at a crucial stage in my current
creative project and have been totally stalled due to lack of
finance. I have considered loans but as I struggle financially
generally it's not an option I would want to take up due to the
high repayment. Saying that, the funds I require to complete my
project are fairly modest (c3,000). I am planning fundraising
gigs to {very} slowly raise the money. I am not keen on the
current Arts Council or the decision makers and feel that having
a loan process would take away the power they have and
enable people to just get on with their work!
Great idea if they are soft loans and come with an industry
specific mentor/trustee.
Creative Financing:
in Scotland
Secondly, the consultation yielded perspectives concerning the viability

of the loan fund proposition that this research was commissioned to
evaluate. Related to this second outcome was an initial view on which
organisations might be interested in investing in a fund should one be
established.
Scottish Government
Creative Scotland
Hitachi Capital
Social Investment Scotland
Creative Arts Credit Union
DSL
Scotwest
ArtCo / Arts Council England
Triodos
Fundbreak
High street banks (via DSL)
18
The main findings concerning the perspectives of consultees regarding

the proposition to establish a fund providing small loans for artists were
as follows:
1.
A fund providing small loans to artists (under 5,000) is

considered likely to be expensive to provide due to the
high transaction costs and possible default rates resulting
from unsecured loans. However organisations such as
Triodos and Social Investment Scotland are interested in the
project and would like to be informed of any developments.
2.
Interviews with public sector consultees reveal a high level

of interest in the proposition. It is seen as timely though it will
be important to clearly define the purpose of launching a fund
since, in addition to alignment with cultural agendas, achieving
economic sustainability in the arts would increase the likelihood
of securing funding
3.
The model of a fund managed by a bank with interest paid

by the public sector (like Own Art) in order to provide 0%
interest loans looks potentially viable given existing
precedents. Public sector supporters of the idea believe that
such a mechanism could be an effective way to stimulate
economic sustainability and growth in the sector, and an
effective vehicle for delivering improved business skills within
the sector. One issue is whether it is possible for a banking
partner to provide business loans at a sufficiently competitive
rate (rather than personal loans as is the case with Own Art).
4.
Deregulation of the credit unions will make them

increasingly viable as a means of supporting the arts. The
forthcoming de-regulation of credit unions presents a timely
opportunity to extend the services of existing credit unions to
creative sector workers. However, care will have to be taken
that these services are sufficiently tailored to the needs of the
sector.
In terms of the opportunity to expand the services of existing

credit unions, there are many opportunities to do so. Scotwest
has already expressed its interested in helping the
commissioners of this study meet their objectives. However,
the Association of British Credit Unions lists over 70 credit
unions in Scotland, with a range of common bond types and
membership ranging from a few hundred to approximately
20,000 (Scotwest). In follow-up research the steering group
could contact these organisations to see which would be best
to work with.
Creative Financing:
in Scotland
www.bop.co.uk
Figure 10: Map of Scottish Credit Unions
Figure 10 (above) shows a map of credit union locations, with the

majority clustered around Glasgow. Under current laws, those credit
unions operating under a geographical common bond could still serve
creative sector members within its agreed geographical area. Although
Scotwest covers the whole of the West of Scotland, other credit unions
could be approached if a more localised approach was considered more
appropriate.
19
Figure 11 (below) shows the cluster of credit unions around Glasgow

and the Scottish central belt in greater detail.
Creative Financing:
in Scotland
Figure 11: Map of Scottish Credit Unions (Central Belt)

www.bop.co.uk
20
5. Financial Modelling
Outcomes
In order to test the feasibility of a loan fund providing small loans to
artists for investment with management by an existing specialist
organisation, a financial model was built by DSL (an existing social
investment organisation providing business loans to financially excluded
businesses). The model drew on the findings from the survey, market
sizing estimates and a series of benchmarks and proxies in order to
show the performance of the fund over a 5 year period.
The model was based on business lending (rather than personal
lending) of unsecured loans. At 5,000, while the loans modelled were
towards the higher end of this brief, they are still considered very small
by social investors. A 5,000 loan also falls well within the European
Unions definition of micro-finance, which is a loan of under 25,000.
The model is based on receiving an initial 2m non-refundable
investment, and while it assumes delivery by an existing organisation
(the costs of setting up a new organisation have not been modelled),
the fund could be delivered by organisations taking a variety of legal
forms, such as a CDFI, a credit union or a bank.
Some inputs to the model were kept constant, while others were varied
in order to test the sensitivity of the model to changes in assumptions.
Figure 12 (below) shows those inputs which were kept constant and the
sources of information for the constants.
Figure 13 (below) shows the effects of varying interest rate and loan
term on the balance sheet of the fund following a 5 year period. It shows
that longer loan terms result in increased profitability. This is due to the
fact that interest is received on the outstanding loan for a longer period
of time. It should be noted that the average loan length stated as
necessary by survey respondents was approximately 2 years. The
effects of varying interest rate are also shown. 5% and 10% were
selected as the most appropriate interest rates to model as respondents
had expressed a preference for borrowing at these rates.
Creative Financing:
in Scotland
Figure 12: financial model constants
www.bop.co.uk
Constants*
Source / explanation
15% default rate
Conservative benchmarking based on unsecured loans
10% bad debt recovery
Conservative benchmarking
10% overheads
Cost of processing loans for an existing specialist

organisation. Does not include start-up costs for a new
organisation.
2m initial grant fund
Source of funds could be public or from a trust / foundation
5k average loan size
Result of online survey concerning average size of loan

required
~9k total interested

market
Survey results and existing market research concerning

creative sector employment in Scotland used for market
sizing. Conservative estimates were made concerning the
percentage of this market that would submit successful
applications
1% interest made on
cash deposits
Benchmarking
Figure 13: Impact of varying interest rate and loan term on 5yr P&L
Impact of varying interest rate and loan term on 5 year p&l

2 year loan
3 year loan
5% Interest rate
-427,000
-407,000
10% Interest rate
-351,000
-305,000
A breakeven model was also created, showing the interest rate that
would need to be charged in order for the fund to be economically
sustainable (not go into debt). Figure 14 (below) shows the set of
assumptions required for a sustainable fund.
21
Figure 14: Breakeven calculation assumptions and results
Breakeven calculation (over 5 year fund)
Figure 15 (next page) shows the balance sheet for the break-even
model. The full break-even financial model including working
assumptions and cash flow forecasts can be found in Appendix D.
Creative Financing:
in Scotland
www.bop.co.uk
Constants revised:
15% default
2% administration fee
10% recovery of debts
written off
10% overheads
2M grant fund to lend
1% interest made on cash
deposits
28% interest rate would
need to be applied for the
fund to break-even
319k bad debts

2.1M issued in loans
1.4M cash in bank
0.6M loan book
outstanding (asset)
p/l profit of 4k
22
Key outcomes of the financial modelling exercise:

Attractive interest rates of 5% and 10% are not commercially
viable and would require additional investment in year 4
A breakeven model would require 28% interest rate and 2%
admin fee to be applied to all loans
The model is sensitive to small changes in assumptions, e.g.
as shown in Figure 13 (above), 10% interest is approximately
100,000 more profitable over a 5 year period than a 5%
interest rate.
Bad debt is the greatest cost for the fund. Assuming that 15%
of borrowers would default, and 10% of the value of their loans
would be reclaimed, a total of ~320,000 would need to be
written off over a 5 year period.
There are other benefits to creating a fund
A loanbook asset is created against which further
funds can be raised from financial institutions
More business investment in the sector might justify
losses under certain government agendas
22
Figure 15: Break even model balance sheet (applying 28% interest)
Profit and Loss Account / Balance Sheet
2011
2012
2013
2014
2015
Total
Income
Loan Interest
Fees for new loans
Bad Debt Recovery
Bank Interest
Creative Financing:
in Scotland
www.bop.co.uk
Capital
25,835
5,203
3,902
18,891
53,831
63,951
6,869
5,152
9,510
85,481
78,717
6,829
5,122
9,837
100,505
102,506
11,258
8,444
9,200
131,408
133,681
12,384
9,288
9,473
164,826
404,690
42,543
31,907
56,911
536,051
Expenditire
Overheads
Bad Debt write off
Loan Interest Payments
Net Income (Loss)
26,015
39,022
0
65,037
34,345
51,517
0
85,861
34,145
51,218
0
85,363
56,291
84,436
0
140,726
61,920
92,879
0
154,799
212,715
319,072
0
531,787
(11,206)
(380)
15,142
(9,319)
10,027
4,264
23
6. Recommendations
A diversity of forms of funding have been identified which have the
potential to meet the stated needs of creative practitioners and microenterprises in Scotland. As such, the outcomes are in line with MMMs
Capital Matters research, which pointed to a need for an enhanced
support framework to build the financial resilience of the UKs creative
and cultural industries.
Three types of demand have been identified by this study:
1.
Demand for small loans of less than 5,000 mostly from sole
traders wishing to make small investments and incremental
improvements to their practices
2.
Demand for larger loans of more than 5,000 along with

complementary business support for borrowers seeking to make a
significant investment in their practice
3.
Demand for loans of all sizes for discrete creative projects such as
musical recordings or films, for which no, or minimal, financial
repayment is required (similar to grant style funding)
Extensive primary and secondary research has been drawn upon to

recommend the most appropriate means of meeting each type of
demand identified. The recommendations are as follows:
1.
Work with existing credit unions to provide services tailored to the

Scottish creative sector
2.
Publicly subsidised low interest business loans with complementary

business support
3.
Partner with crowdfunding sites to provide project funding
6.1 Recommendation 1: Work with

existing credit unions to provide services
tailored to creative sector customers
Creative Financing:
in Scotland
www.bop.co.uk
Type of demand: Mostly individual creative practitioners with low

income and a stated preference for social banking services
Credit unions provide a range of financial services for individuals who
fall within the common bond of the union. A common bond can be
geographical, restricting membership to those living or working within a
particular area, or trade-specific, restricting membership to a particular
trade or sector e.g. taxi drivers.
Legislation which allows credit unions to apply to hold multiple common
bonds is currently being enacted. The changes will also allow credit
unions to serve corporate customers in addition to individuals and to
provide business as well as personal loans. Essentially, this would
mean that an existing credit union might be able to extend its services
to individuals and small organisations operating in the Scottish creative
sector. It is anticipated that these new laws will come into effect in early
2011. However, the focus of credit unions will most likely remain on
providing personal financial services for low income groups.
With 64% of respondents stating that they earn 0-10,000 from their
creative practice, and 67% requiring loans of less than 5,000 (a
quantity of money that suggests a need for personal, rather than
business loans), a credit union could be an appropriate means of
providing additional support to Scottish creative practitioners and microenterprises. Further, there appears to be significant support for the idea
within certain sub-sectors such as the visual arts.
The main advantages of the credit union model as a means of servicing
creative sector professionals are as follows:
Credit unions are social businesses where profit, rather than

being distributed amongst shareholders, is re-invested,
24
resulting in improved services and reduced interest rates for

loans / higher rates for saving. The social purpose could be a
draw for creative practitioners and micro-enterprises keen to
find an alternative to traditional banking services.
Credit unions encourage their members to save as well as

borrow. This addresses the concerns raised by some
consultees surrounding the role that loans can play in creating
unnecessary debt.
At approximately 12% for loans of under 5,000, rates for loans
are more competitive than those of high street banks and
significantly more competitive than the 28% rate estimated for
the CDFI break-even option.
will mean that profits from creative sector members will benefit the
entire membership base (rather than just those within a creative sector
common bond) it should be possible to tailor specific services to
creative sector members. This could include sector specific marketing
materials and even a new website. Marketing directly could increase the
visibility of credit unions and the appropriateness of their services to the
creative sector.
6.2 Recommendation 2: Pilot a publicly

subsidised low interest business loans
scheme with business support
Whilst we have not proposed a formal linkage of business support and

training with this recommendation there is evidence that practitioners in
this part of the sample group would benefit from such intervention and
that many would welcome its availability.
Type of demand: larger loans of more than 5,000 along with

business support for borrowers seeking to make a significant
investment in their practice
Credit unions and other supply side consultees suggest that they may
be interested in catering for creative sector customers once the new
legislation comes into effect. Whilst working with an existing credit union
www.bop.co.uk
The website of the Association of British Credit Unions shows that there
are approximately 70 credit unions in Scotland, many of which may be
interested in providing services for artists. An appropriate next step
would be to reach out to several of these credit unions in order to find
the one best positioned, and most willing, to deliver creative industry
specific financial services.
In terms of implementation, working with existing credit union(s) would

avoid the high cost of establishing a new organisation, and of
bankrolling it until it achieves the critical mass of customers required for
sustainability, which could take several years.
The Creative Arts Credit Union (CACU) in Toronto is an example of a

standalone organisation specifically for creative sector workers. So far it
has received approximately 1.24m (C$2m) of funding and currently
has a membership base of 700 and assets outstanding of 8.68m
(C$14m). CACU anticipates requiring 12.4m (C$20m) of assets
outstanding to become sustainable, which it hopes to achieve within
three years of its launch (in 2009). Given the Scottish market sizing
estimates undertaken as part of this research, it could take at least this
period of time for a new credit union to achieve sustainability.
Creative Financing:
in Scotland
While a standalone business loan scheme is unlikely to be a viable

commercial proposition, this study has revealed that demand for larger
sums does exist, with approximately 33% of respondents stating a need
for loans in excess of 5,000, and almost all consulted organisations
stating a need for sums in excess of this amount. Over half (52%) also
stated that their ambition was to grow their practice.
With significant anecdotal evidence that creative individuals and
organisations experience difficulty securing business loans from banks8,
The body of anecdotal evidence concerning difficulties in securing business loans from
banks is supported by the outcome of consultation with arts organisations conducted as
part of this research.
25
and of a strong stated need for creative organisations to develop

improved business skills, a pilot project testing the proposition of
providing business loans and support to the target group could be a
valuable experiment. A pilot scheme would provide hard evidence
concerning the true viability of the scheme, as well as information on the
complete (rather than estimated) investment needs of the Scottish
creative sector.
Delivering a pilot with the support of a banking partner (the same model
as the Own Art scheme) has a number of benefits over alternative
means of delivering a publicly subsidised loan funding mechanism, such
as the CDFI. Most notably, the presence of a banking partner negates
the need for up-front investment since the bank can draw on its own
reserves to provide the loans. For the public funder, the cost of the
scheme is thus limited to covering the interest necessary to keep
interest rates for the borrower low (0-10%), and therefore attractive.
Further consultation with CDFIs would be necessary to discover
whether organisations existed with sufficient cash reserves to be able to
offer a similar arrangement.
ArtCo, a subsidiary of Arts Council England (ACE) which manages the
Own Art scheme, is currently in discussions with potential banking
partners regarding the possibility of running a pilot scheme providing
small business loans of approximately 15,0009. In order to make the
loans affordable to small creative companies, ACE will pay some or all
of the interest on the loan, and the banking partner would most likely
require ACE to underwrite the risk of default.
Should they succeed in securing a banking partner on favourable terms,
ArtCo hope to run a pilot scheme in London to research the viability of
this method of investment for small creative businesses. Business
training will be compulsory for most loan recipients.
Initial conversations with ArtCo suggest they would be interested in
working in partnership with Scottish arts organisations to run a parallel
A loan of 15,00 would still be considered micro-finance within the EUs definition, where
loans up to 25,000 are defined as such
business loans pilot in Scotland. Due to differences in the business

support infrastructure, the Scottish model would require alternative
support to that in the London model. With 38% of survey respondents
already stating that they would turn to them for business support, the
Cultural Enterprise Office network (CEO) could be well placed to
provide business training.
Creative Financing:
in Scotland
www.bop.co.uk
The target group for such a scheme would mainly be those creative
organisations who have growth ambitions, rather than those looking for
small investments aimed at achieving sustainability. With 32% of
respondents to our survey expressing a desire to borrow over 5,000,
and just over 50% stating their ambition was to grow creative practice
there could be significant demand for the proposed scheme.
A key advantage of partnering with a bank would be to negate the need
for significant up-front investment, reducing the funders role to paying
for interest on loans and potentially underwriting the risk of default.
However, if a significant sum were committed by public funders, or
raised from individual philanthropists, a fund could potentially be
managed by an existing social investor.
It is clear from the financial modelling exercise that such a fund would
steadily lose money over time if lent at sufficiently low interest rates.
Experienced social investors consulted, although expressing interest in
the idea, all commented that figures of 5,000 were much smaller than
they typically managed and that they tended to provide loans to
organisation rather than individuals. For example, the 30m Social
Investment Fund (managed by Social Investment Scotland) is looking to
make investments of at least 100,000. DSL lend sums for start-up
investment to individuals, generally of 15-30,000.
Although social investment bonds (SIBs) are increasing in popularity as
vehicles for attracting investment from individuals, companies and
charitable foundations to enable investments achieving social
outcomes, existing examples show that SIBs invest in lending to
organisations (charities and social businesses) rather than individuals.
26
For example, a scheme in East London raised 20m to invest in 2009.

The Charity Bank launched an SIB for Liverpool which invests sums of
between 50,000 and 2m in social enterprise initiatives. These much
larger sums indicate it is unlikely that this approach would be
appropriate for a scheme lending much smaller sums to the target
group of creative practitioners and micro-enterprises.
6.3 Recommendation 3: Partner with

crowdfunding sites to provide project
specific funding
Type of demand: loans of all sizes for discrete creative projects
such as musical recordings or films, for which no, or minimal,
financial repayment is required (similar to grant funding)
Crowdsourcing is an emerging means of peer-to-peer funding (an
option identified in the original brief for this study) by which discrete
creative projects such as short films, musical recordings, performances,
art works and novels can be funded. Projects can be supported by
several investors, who, as with grant funding, dont expect to receive
their original investment back.
In place of cash, investors receive benefits developed by the project
owners such as personal performances, credits on-screen or in
programmes, tickets to screenings, and, in some cases, the opportunity
to influence the content of the project. Crowdfunding sites take a
commission of approximately 7.5% of the total funds raised in exchange
for facilitating the transaction.
With no obligation to repay investors, creative projects do not need to
demonstrate commercial viability in order to secure funding. In this
sense, crowdfunding is a mechanism similar to grant style funding.
Further, crowdfunding attracts additional funds from private individuals,
and in so doing grows the total level of funding available within the
creative sector.
In order to help the target group engage in the growth of crowdfunding

as a means of financing their work, member organisations in Scotland
could partner with sites operating in the UK, providing them with details
of appropriate projects in return for discounts on the rate of commission
charged. Fundbreak, an Australian site which has recently launched in
the UK is one such organisation which would be interested in
establishing partnerships of this type.
Creative Financing:
in Scotland
www.bop.co.uk
Since crowdfunding sites are commercial ventures, and since revenue

is accrued as a percentage of funds raised for projects, there could be a
skew towards hosting only those projects which look set to achieve
higher levels of funding. Smaller, lower value projects could remain
marginalised.
The creation of a socially motivated site which caters for and supports
smaller projects could be a good use of public subsidy and could attract
additional private financing to the sector. Sites such as wedidthis.org.uk
have been successfully established as philanthropic ventures and such
a site might be managed by an organisation currently delivering similar
services. For example The Booth ticket-selling site managed by Hi-Arts
provides a cheap on-line ticket selling service for small events and has
much of the necessary IT and online transaction competencies required
to deliver a crowd-funding site in house.
The funds required to establish such a site could be raised centrally, or
regional arts organisations could syndicate resources to build and
manage the site.
6.4 Competitor / collaborator analysis

Each recommendation of this study comes with its own set of
competitors / collaborators. For example, the existing UK crowdfunding
sites (the number of which appears to be increasing) while potential
collaborators, could become competitors if a publicly funded site were
launched.
These collaborators / competitors are listed in Figure 16 (below)
alongside their respective recommendations.
27
Figure 16: List of potential competitors and collaborators

Recommendation
Competitors / collaborators
1. Extend credit union - Scotwest Credit Union
services to creative
- Capital Credit Union
practitioners
- Association of British Credit Unions Limited
(ABCUL)
2. Additional business - ArtCo Ltd
loans and business
- Scottish Government
support
- Creative Scotland
- Arts Council England
- Hitachi Capital
- Cultural Enterprise Offices
- Business Gateway
- Hi-Arts
- DSL Business Finance
- Triodos
- Charity Bank
- Venturesome
- Social Investment Scotland
- The Social Investment Business
- Scotcash
3. Crowdfunding /
- Fundbreak UK (www.fundbreak.co.uk)
peer-to-peer
- Sponsume (sponsume.com)
- Crowdcube (crowdcube.com)
- The Booth (http://www.thebooth.co.uk/)
- WeDidThis (http://wedidthis.org.uk/)
Creative Financing:
in Scotland
www.bop.co.uk
28
7. List of Appendices
Appendix A: Full online survey results in PDF form
Appendix B: List of 113 anonymous open comments left by

online survey respondents concerning the idea of providing
loans to artists
Appendix C: List of 119 descriptions of potential uses /

investments that a loan could support left by online survey
respondents
Appendix D: Full break-even financial model created by DSL
Appendix E: Original tender documents and related

background research
Creative Financing:
in Scotland
www.bop.co.uk
29
Loans for Scottish Artists and Creative Practitioners
1. Do you work full-time or part-time as a creative practitioner?

Response
Response
Percent
Count
Part-time
47.4%
157
Full-time
52.6%
174
answered question
331
skipped question
2. Do you work as an individual or as part of an organisation?
I work as an individual
Response
Response
Percent
Count
66.4%
221
26.4%
88
Organisation (2-3 people)
5.4%
18
0.3%
0.0%
Organisation (More than 10 people)
1.5%
answered question
333
skipped question
As an individual AND as part of an

organisation or collective
1 of 20
3. Which sector(s) do you regard yourself as belonging to?

Response
Response
Percent
Count
Visual arts
58.2%
188
Crafts
23.8%
77
Music
9.6%
31
7.1%
23
12.4%
40
Publishing and literature
21.7%
70
Design and illustration
13.0%
42
Other (please specify)
35
answered question
323
skipped question
13
Digital arts (computer games, webdesign etc.)

Performing arts (theatre, comedy,
dance etc.)
2 of 20
4. Where in Scotland are you based?

Response
Response
Percent
Count
1. Shetland
7.0%
23
2. Orkney
0.6%
3. Western Isles (Outer Hebrides)
0.9%
4. Highlands & Moray
7.6%
25
5. Aberdeen City & Shire
3.6%
12
6. Angus & Dundee
4.6%
15
7. Perthshire
2.4%
3.3%
11
9. Fife
7.9%
26
10. Edinburgh & the Lothians
23.1%
76
11. Glasgow & the Clyde Valley
34.3%
113
12. Ayrshire & Arran
1.8%
13. Dumfries & Galloway
0.9%
14. Scottish Borders
1.8%
answered question
329
skipped question
8. Argyll, the Isles, Loch Lomond,

Stirling and Trossachs
3 of 20
5. Are you or your organisation officially registered as any of the

following?
Response
Response
Percent
Count
Self Employed / Sole Trader
84.9%
214
Limited Company
8.7%
22
Community Interest Company
1.2%
Partnership
4.0%
10
Co-op
0.0%
Limited Liability Partnership
1.2%
44
answered question
252
skipped question
84
6. In total, approximately how much do you or your organisation earn

through your creative / artistic practice every year?
(Please discount income earnt outside the creative sector)
Response
Response
Percent
Count
0-10k
64.2%
210
10-25k
26.9%
88
25-50k
5.5%
18
50-75k
1.8%
75-100k
0.6%
100k +
0.9%
answered question
327
skipped question
4 of 20
7. For how long have you / has your organisation been working as a
creative practitioner / practice?
I'm yet to start working as a
Response
Response
Percent
Count
4.5%
15
8.2%
27
Working for 1-3 years
16.1%
53
Working for 3 years +
71.2%
235
answered question
330
skipped question
creative practitioner
I started within the last 3 months
(start-up)
8. Where did you find the money you needed to set up your creative
practice? (Please tick all that apply)
I didn't need any money to set
Response
Response
Percent
Count
30.4%
Support from family or friends
26.1%
Personal savings
56.5%
13
4.3%
Loan (from a Bank)
4.3%
Loan (from a Social Enterprise)
4.3%
Credit cards
4.3%
Grants
8.7%
answered question
23
skipped question
313
myself up
Cross-subsidisation from another

job
5 of 20
9. In total, how much money have you borrowed to start up your creative
practice?
Response
Response
Percent
Count
I haven't borrowed any money
80.8%
21
0-500
3.8%
500-1,000
7.7%
1,000-5,000
3.8%
5,000-10,000
0.0%
10,000-15,000
3.8%
15,000-20,000
0.0%
20,000+
0.0%
answered question
26
skipped question
310
6 of 20
10. Where did you find the money required to sustain and grow your
creative practice? (please tick all that apply)
Profits from sales of creative
Response
Response
Percent
Count
56.0%
167
Support from family or friends
29.5%
88
Personal savings
43.6%
130
44.0%
131
Loan (Bank)
6.0%
18
Loan (Social finance)
1.3%
Credit cards
12.4%
37
Grants
41.3%
123
30
answered question
298
skipped question
38
services and products
Cross-subsidisation from another

job
7 of 20
11. In total, approximately how much money have you borrowed to sustain
or grow your creative practice?
I have never borrowed money to
Response
Response
Percent
Count
59.8%
183
0-500
4.9%
15
500-1,000
6.5%
20
1,000-5,000
14.7%
45
5,000-10,000
5.9%
18
10,000-15,000
2.9%
15,000-20,000
2.0%
20,000+
3.3%
10
answered question
306
skipped question
30
sustain or grow my practice
12. If there was a fund aimed at lending money to artists and small creative
enterprises would you be interested in taking out a loan? (either now or in
the future)
Response
Response
Percent
Count
Yes
56.5%
178
No
43.5%
137
answered question
315
skipped question
21
8 of 20
13. *Optional*
Do you have any comments about whether you think loans for investment
in creative activities is a good idea or not?
Response
Count
112
answered question
112
skipped question
224
Response
Response
Percent
Count
14. How much money might you need to borrow?
0-500
6.3%
11
500-1000
8.5%
15
1,000-3,000
31.3%
55
3,000-5,000
19.9%
35
5,000-10,000
20.5%
36
10,000-15,000
5.7%
10
15,000-20,000
3.4%
20,000 +
4.5%
answered question
176
skipped question
160
9 of 20
15. What do you think you would use the loan for?
Response
Response
Percent
Count
To buy equipment or machinery
58.9%
99
To buy materials
47.0%
79
14.3%
24
To stage an event or exhibition
51.2%
86
To pay for marketing / websites
48.2%
81
To buy a vehicle
11.3%
19
31.5%
53
To pay off existing debts
8.3%
14
To leverage / match fund a grant
19.0%
32
34.5%
58
37.5%
63
27.4%
46
21.4%
36
29
answered question
168
skipped question
168
To pay for staff / contributors (e.g.

performers, artists, musicians)
To pay for rent / premises e.g.

studio space
To help cash-flow the business

(funds to sustain the business while
waiting for other income to arrive)
To pay for research/development
time
To fund a group project with other
artists / practitioners
To pay publishing costs
10 of 20
16. *Optional question*

Could you write a short sentence describing exactly how you might invest
a loan and how that investment would lead to a direct financial return for
your practice?
(e.g. I could pay to have my pictures framed which would enable me to sell
them at an exhibition..)
Response
Count
118
answered question
118
skipped question
218
17. How long do you think you would require to pay back a loan?
Response
Response
Percent
Count
0-3 months
1.7%
3-6 months
6.4%
11
6-12 months
20.2%
35
1-2 years
35.8%
62
2 years +
35.8%
62
answered question
173
skipped question
163
11 of 20
18. Do you have collateral against which you could guarantee a loan? (e.g.
a house, a car, a valuable piece of equipment)
NOTE: Collateral in this context refers to something of value which you
own, and which a lender could sell should you fail to pay-back a loan
within the terms of the loan agreement
Response
Response
Percent
Count
Yes
52.3%
90
No
47.7%
82
answered question
172
skipped question
164
12 of 20
19. On a scale of 1-10, approximately how interest would you be in taking out a
loan at the following interest rates? (10 is most interested)
NOTE: 9% (APR) is a competitive rate for a 5000 personal loan (business loan
rates are often higher) taken out by a home-owner with a national bank,
repayable over 1 year
0-5%
5-10%
10-15%
15-20%
20-25%
25-30%
30-35%
35-40%
10
79.9%
4.3%
6.1%
1.2%
2.4%
1.2%
0.0%
1.2%
0.0%
3.7%
(131)
(7)
(10)
(2)
(4)
(2)
(0)
(2)
(0)
(6)
22.9%
27.9%
12.9%
9.3%
5.7%
7.1%
2.9%
0.0%
1.4%
10.0%
(32)
(39)
(18)
(13)
(8)
(10)
(4)
(0)
(2)
(14)
0.8%
2.5%
15.7%
7.4%
12.4%
5.0%
6.6%
4.1%
5.0%
40.5%
(1)
(3)
(19)
(9)
(15)
(6)
(8)
(5)
(6)
(49)
1.7%
1.7%
2.6%
7.8%
4.3%
8.6%
3.4%
6.0%
1.7%
62.1%
(2)
(2)
(3)
(9)
(5)
(10)
(4)
(7)
(2)
(72)
2.6%
0.0%
0.0%
1.8%
7.0%
0.0%
4.4%
1.8%
3.5%
78.9%
(3)
(0)
(0)
(2)
(8)
(0)
(5)
(2)
(4)
(90)
2.6%
0.0%
0.0%
0.9%
0.0%
3.5%
3.5%
6.1%
1.7%
81.7%
(3)
(0)
(0)
(1)
(0)
(4)
(4)
(7)
(2)
(94)
2.6%
0.0%
0.0%
0.0%
0.0%
0.9%
4.4%
0.0%
7.0%
85.1%
(3)
(0)
(0)
(0)
(0)
(1)
(5)
(0)
(8)
(97)
2.7%
0.0%
0.0%
0.0%
0.0%
0.9%
0.9%
1.8%
0.0%
93.8%
(3)
(0)
(0)
(0)
(0)
(1)
(1)
(2)
(0)
(106)
answered question
skipped question
13 of 20
Response
Count
20. Are you confident in your ability to create a simple business plan?
(A business plan would include a forecast of cash-flows over the next 12
months)
Yes (I've done this before)
Response
Response
Percent
Count
49.2%
148
25.2%
76
7.0%
21
No (I've never done this before)
12.3%
37
Don't know
6.3%
19
18
answered question
301
skipped question
35
Yes (I haven't done this before but

am still confident)
No (I've tried before and found it
difficult)
14 of 20
21. In which areas (if any) do you feel you lack business related skills?
Response
Response
Percent
Count
I don't lack skills
14.0%
42
Finance and accounting
45.8%
137
Business planning
33.1%
99
17.1%
51
30.1%
90
40.8%
122
51.5%
154
Product design and development
8.7%
26
My skills as an artist
3.7%
11
18
answered question
299
skipped question
37
Computer / software skills (e.g.

Microsoft Excel)
Marketing, promotion and
communication skills
Finding routes to market
Legal issues, contracts, and
copyright
15 of 20
22. Over the next three years what is your ambition for your creative
practice?
To grow
Response
Response
Percent
Count
52.3%
150
57.1%
164
10.8%
31
0.3%
31
answered question
287
skipped question
49
To become sustainable (earn all

the money I require to sustain
my practice by selling products
and services and reduce my
dependence on public subsidy
or a second job)
To keep my business the way it is
now
To downsize
23. What do you think are the main problems you will face in growing and
sustaining your creative practice over the coming few years?
Lack of accessible cash

Lack of professional creative
assistance / technical support
Lack of business support
Limited routes to market /
opportunities to sell my work
16 of 20
Response
Response
Percent
Count
57.8%
152
24.0%
63
23.2%
61
56.3%
148
64
answered question
263
skipped question
73
24. Who would you turn to if you required additional information and
advice on financial matters? (Tick all that apply)
Response
Response
Percent
Count
a friend / family member
54.9%
158
My bank
31.6%
91
Business Gateway
28.1%
81
Cultural Enterprise Offices
37.5%
108
Highlands and Islands Enterprise
6.9%
20
31.6%
91
Search on-line
38.2%
110
Money supermarket web-sites
6.3%
18
45
answered question
288
skipped question
48
Creative Scotland (New body

replacing SAC and Scottish Screen)
25. Have you ever borrowed money to invest in your creative practice
before?
(Please tick both 'yes' and 'I tried but was refused' if both apply)
Yes
I tried to borrow money (e.g. from a
bank) but was refused
No
17 of 20
Response
Response
Percent
Count
20.9%
63
6.0%
18
75.5%
228
answered question
302
skipped question
34
26. If you have tried to borrow money for your creative practice before
and been refused what was the reason given?
(Please leave blank if you have never experienced this problem)
Unsatisfactory credit rating

(business)
Unsatisfactory credit rating
(personal)
Lack of trading history
Business / project idea not seen
as 'viable'
Lack of business plan
I was not able to contribute money
of my own
18 of 20
Response
Response
Percent
Count
12.5%
20.8%
16.7%
29.2%
0.0%
20.8%
15
answered question
24
skipped question
312
27. If you have borrowed money for your creative practice before, how
much interest were you charged?
Response
Response
Percent
Count
0-5%
27.9%
19
5-10%
27.9%
19
10-14%
17.6%
12
14-17%
2.9%
17-20%
4.4%
20% +
1.5%
Don't know
17.6%
12
answered question
68
skipped question
268
28. If you have borrowed money for your practice were you asked for any
of the following to secure the loan?
Security to be taken over your

main residence / home
Security to be taken over a second
property
Security to be taken over business
assets
Personal obligation to pay e.g.
personal guarantee
Enterprise finance guarantee
19 of 20
Response
Response
Percent
Count
24.0%
12
10.0%
8.0%
68.0%
34
0.0%
answered question
50
skipped question
286
29. Please enter your name and contact information if you would like to
enter yourself for the 20 amazon draw
Winners will be notified by Friday 3 September 2010
Please note that all personal information will be kept entirely condifential
Response
Response
Percent
Count
Name
100.0%
224
Email address
100.0%
224
Phone number
86.6%
194
answered question
224
skipped question
112
20 of 20
BOB CONSULTING
Creative Financing: feasibility study into financial mechanisms for supporting small-scale creative
activity
in Scotland - Appendix B
Q. Do you have any comments about whether you think loans for investment in creative activities is a good idea or not?
Yes, as long as the interest rate is reasonable and flexible according to the organisation's needs and the profits put back into future loans for creative purposes.
Debt is unwise. Income doesn't increase with age, experience, acclaim or critical success. It's as likely to drop. So repayment of loans would be an additional, highly
The highlands as a place to live as an artist creates a space where you have all the inspiration and drive but no outlets for work and no funds for materials. A fertile
environment if one can apply for funding.
it is a good idea, as the financial rewards are great. The issue is the lack of councils and business organisation to recognise arts are a valuable comedy to help
investments in while also targeting mature people in this sector, and encourage more grants for the 30 + bracket
I think it's a great idea, with an experienced person/s judging the need and ensuring the money is being spent wisely, and can be repaid easily. I am at a crucial
stage in my current creative project and have been totally stalled due to lack of finance. I have considered loans but as I struggle financially generally, it's not an
option I would want to take up due to the high repayment. Saying that, the funds I require to complete my project are fairly modest (c3,000). I am planning
fundraising gigs to {very} slowly raise the money. I am not keen on the current Arts Council or the decision makers and feel that having a loan process would take
I think it's a fantastic idea. The problem with recording music is that fewer labels are paying an advance, therefore it's becoming more and more difficult to raise
Great idea if they are soft loans and come with an industry specific mentor/trustee.
YES WE WOULD WE HAVE JUST RENTED STUDIO AT MEDOWBANK COST AT 148 MONTH WHICH HE IS USING HIS SICKNESS BENEFITS TO PAY AS HE HAS
FORMS OF DEPRESSION AND WHEN WE WERE SHOWN AROUND THE BENEFITS TO MEETING ARTISTS ALIKE AND GETTING HELP FOR GALLERIES AND SELLING
WERE SUCH A BENEFIT TO HIM SO TO MISS OUT BECAUSE WE CANT AFFORD THE RENT
I think it is a good idea, as long as the interest and pay back times are reasonable and generous and well checked (i.e. that you will be able to pay them back).
The Small Business Finance (Dundee) Ltd have a great model for loans run through the Business Gateway in Dundee. We have accessed that but find there is very
yes, if the interest is competitive, and there is a measure of flexibility in repayments. The loan scheme to buy Artworks is a great idea.
If they are fast track and very low interest. However, it really depends on how they are processed, and I guess like all credit facilities it's important to understand
whether or not the money can be paid back and how much pressure this puts on the artist financially. Perhaps small loans to cover basic exhibition costs and travel
for artists, however I guess this, where ever possible, should be covered by the gallery or exhibition co-ordinator but the stark reality for emerging artists is that the
artist usually has to cover this themselves. I think to develop new work etc, this should be in the form of grants where possible to encourage artists to push their
The loan that I took out was for kit, computer & sound equipment at a time I knew I had a job coming that would pay for it. It was a short term loan. I would not
have been comfortable taking out a loan had I not known there was the definite ability to pay it back within a few months. I personally am not comfortable with
debt, I pay my credit card off every month etc etc. I am lucky to have a job that supports my practice and I have been lucky to receive SAC funding at key
moments. I dare say that this idea could work well for some in addition to existing funding methods, but for an experimental creative practice adding the pressure
of paying back a debt may well change the type of work and experience that artists feel able to aspire too, especially if the practitioner lives and creates only using
I think it's a terrible idea and is likely to get a lot of people into debt.
If the interest rates are realistic and the repayment schedules are flexible given the erratic nature of establishing a creative practice due to family financial
I believe that loans are a bad idea for those who are involved in socially-engaged or community organisational work. In fact I believe this work should be supported
by the state in the form of grants and even paid salaries.
I think it is a very good idea particularly for younger practitioners. It would mean that fewer talented people will give up.
I think they are a bad idea unless they are matched 50 / 50, due to the high risk that small businesses may go bankrupt and therefore unable to repay.
Yes, particulary for enterprising foreign artists like me. Diversity loans.
Perhaps... could help offset costs of equipment etc which at the moment has to be purchased on an as and when basis.
Of course! But carefully given, with advice, to prevent rash debt
Sometimes a 'soft' loan or grant makes the difference between a significant development or new creative initiative happening or being kept on the back burner
Loans specifically aimed at creative industries is a good idea.
It is a good idea as long as it is spent wisely to enhance the existing business. also it depends on the interest repayment if there is one. Ideally no interest would
be more beneficial to sole traders like myself.
Yes, I believe it would be a valuable resource, in terms of enabling creative practitioners to acquire the equipment/materials/software they need to develop their
creative enterprise, or even in terms of facilitating periods of creative enterprise in which the practitioner is not bringing in any money.
I think loans are a great idea, but for some one like me just starting out, I would only take a loan if the repayments could be kept small.
Short of all other funding, a (very) low interest loan, tied to return per project, may be a viable option, as long as there were no comparable limits as to who is
eligible (as long as commitment demonstrable).
I think this is a great idea, particularly for capital expenditure items such as equipment to progress new ways of producing.
It is because nothing has been available to artists like me before and therefore I can't publish my company the way I want to in a professional manner.
Any opportunity for small creative practices to start up and/or expand is important, both to establish an creative and innovative culture and for the country and the
As someone who graduated from a fine art degree a year ago, I am taking the first steps to establish myself as an artist. Having already accumulated a debt of
8000 at university I would be unwilling to add to this by taking out another loan when I cannot guarantee any financial return.
I hope such loans would bridge the gap between arts funding grants and commercial loans. Often, creative projects fall into a grey area between commercial
enterprise and creative endeavour, rendering the project ineligible for funding from either sector.
they would have to be accessible and have craft minded people in charge instead of someone saying that wont work because they cant understand it
Although the option of having a loan could be very useful to artists, I feel that the problem is that loans need to be paid back, and I foresee that as artists stand
(with poor pay conditions), many loans would not be paid back immediately and artists would accumulate a lot of interest, adding to the amount they need to pay
back. I think artists should get paid enough so that they do not have to take out loans.
There is not the audience capacity in Scotland to make loans for producing drama viable. We would be looking at 1-2 person shows or endless repeats of Miss
I think a specialised loan for creative activities is a good idea, as for most standard bank/small business loans creative practitioners are not usually viewed as viable
loan candidates, due to their relatively low turnover/profit margins.
Loans would allow practitioners to develop their work as well as pay for additional courses to increase their skills within their field
Absolutely - although I am in the lucky position of not needing a loan, if I did not have personal savings I would definitely apply and would need this kind of
support for at least the first three to four years.
help and advice in marketing and selling is needed as well as loans.
I think its a brilliant idea, as long as the charges are realistic and considerably less than a bank loan or credit card debt. and could come with financial
guidance/advice. There are not enough grants, especially for mid-career businesses, and some grants expect you to want money to radically change your business,
not sustain it or have time to naturally develop ideas. It would be great to use it to pay for some time without having to subsidise with other jobs/income.
Of course, although the most important part will be the pay-back options, as many loans will be invested for the long-term vsv short-term turnaround profit
Yes, low cost loans, or grants to enable growth in Scottish arts & creative industries.
If it minimal interest was charged with long repayment period, so people who need to borrow can afford to repay.
Within the work I do, I think it would be helpful to have the opportunity or access to some small funding as I work with young mums in schools and in family units
teaching them arts and crafts, there is some funding within the organisation I might be working in but not sufficient to complete or showcase some of the efforts of
these individuals. For example: framing of art work, sewing machines for material work, etc; Sometimes I find using my own resources without having to wait for
There are two questions here. One regards loans, the second regards investment, I wish to comment on the issue of loans as being an inappropriate model for
supporting creative practice in comparison with the current model of artist's grants. There is a great deal of concern about anticipated changes for supporting the
cultural life of Scotland, support which until now has ensured a vibrant, growing community - not only the creative community, but also the broader community
which benefits from a creative culture in general. Loans rely on being repayed, and require an economic plan which can often compromise the innovation and true
creativity which have kept scotland at the front of cultural innovation for so long (look at Scottish contributors to the Turner Prize for example - something which
I am a working artist and find the idea of loans for creative practice absolutely shocking and to perfectly honest, a danger to the creative future of Scotland. The
majority of artists working today do not make a great deal of money, but we do what we do because we believe in the power of what culture contributes to society
and our role within that. We rely on funding such as the SAC/Creative Scotland to support the development of work that is free from the restrictions of market
driven practice. Culture contributes something that is invaluable to local communities and society at large. Scotland has been visionary in its past understanding of
the critical need for this kind of support. The idea of loans for artists is not only a terrible idea, it is an inappropriate financial model for the majority of artists
working in today, and would actually close down the vibrant, innovative and world re-known artistic practice that Scotland is famous for. The majority of artists
survive on a limited income, operating from a point of view that freedom within artistic practice, separate from the restrictions of 'income generating artwork' is a
critical component of generating truly innovative, powerful culture. I cannot on good faith complete this questionnaire as I seriously question the reasoning behind
The art market is so unpredictable that the necessity of repaying a loan would place a heavy burden on an artist, and might well distort his creativity into
deliberately commercial art forms, so I think it is not a good idea except for commercial artists whose work is already accepted and who only need the money to
a good idea - maybe like a Credit Union operation ?
I think personal or individual loans for creative activities are a terrible idea. Individual debt should not be encouraged. Loans for creative organisations however,
could be an option, in particular for, for example, young commercial galleries. For individual artists though, no, never, it would kill rather than foster creativity.
Loans are not a practical proposition especially for a sole practitioner also working in another job as a loan will simply add to the financial burden. The only
exception I would make to this is where the loan is part of a business plan that has been approved because it shows clear evidence of a likely swift financial return
arising from the use of the loan e.g. to purchase equipment to increase productivity and output for an established market developed by the practitioner.
It would have to be for work due to be completed where the payment would not be made prior to completion and cost less than current overdraft facilities.
Difficult to answer above as I cannot actually afford loans anymore, living on total financial edge, i.e. on overdraft and credit card limits. But always looking for
I think it is a very good idea providing the terms are reasonable and offer a suitable time to repay the amount
I do as long as the funds are not misappropriated or go to people who the panel know. Also I think that when the creative artist is successful they add and give
extra back thus making the pot of funds grow.
I wonder how I would be able to pay back the loan? I am not convinced loans are a good idea because I work with minority groups who need higher resources for
quality arts projects. The projects I run are not generating surplus to sustain the organisation (not-for-profit) and therefore I would be apprehensive in borrowing
It is - I struggled to fund myself, despite applying for many grants.
As you generally don't make much you would have to be careful. Maybe for longer lasting benefits such as equipment
The loans for creative investment are a good idea and may help with setting up as a creative professional while working part time.
Developing a creative practice means that one must have time to train or develop technical skills, and research time is key to the process. Life is already a struggle
for some artists and the idea of loans is ok if you are a business with a regular or average income, but some of us have commissions which take weeks to make.
My work offers no financial return on completion (I make video/sound works), so taking out a loan would be frankly foolish. I have been able to continue as an
artist over the last 10 years because of SAC funding/residencies and self-support from related technical work I provide to other artists and organisations. I am
currently employed full time as a gallery manager (though dying not to be!). With a young family/mortgage I simply cannot take the risk of borrowing money to
fund my creative practice as I know that I am unlikely to be able to repay the loan from the products of that practice. encouraging the use of artists loans as a
Only if interest free.
Why not? They could make the difference between a project proceeding or not.
fantastic idea. the creative arts crucial in society's development and future. it would be good to have a financial institution which understood and believed in the
I think small loans would be a good idea.
Although this is not useful to me personally, I can see that it might well help young artists needing help at the beginning of their careers.
I do not think loans are particularly helpful. Most craft workers need regular selling opportunities other than church halls and small fairs. Co-operatives working
Depends on what the interest on the loan is but a loan would help to realize some projects.
I think loans for creative practice are a great idea. Often there are little or no options for artists, musicians and makers to get their projects off the ground, without
additional help from friends, family and stiff competition for a grant. A loan would increase opportunities, help the creation of new work, and provide that much
needed next step in furthering practice not only for the artist themselves but in creating a positive impact within the wider community.
I think its a very good idea, I am actually looking to borrow money at them moment but reluctant to take a bank loan with high interest
No I do not think it is a good idea, it can be a burden. The system in Ireland for artists working there is a much better and it might be worth studying that too.
particularly helpful to anyone starting up, renting work-space, setting up exhibition.
My work does not need big machinery or investment to produce. Art is a risky business, so I would rather not take a loan and then be bound by repayments I
might not be able to do. That might be different for artists that need bigger investments for creating their work.
As part of an array of options yes, as the only option emphatically - NO
with the interest rates at the moment you will end up paying the loan for years
I think it is a good idea, especially in this economic climate where bank loans for creative arts practices may be harder to obtain.
Unless the creative industry was commercial this would not work. There are a lot of creative practices which do not have the opportunity to create an income from
At a time when credit is hard to come by and government spending is being tightened I think if the loan is under written in the same way the government under
right loans aimed at business's, But is easier to apply for. Then yes it would be welcomed by myself and many other artists. It would be nice if visual arts gets at
least an equal chance and artist in this county ends up being eligible. I would also like to think that Age is neither an advantage or a restriction as many grants and
Yes, because it's very difficult to convince a bank to loan. Also when you are in creative practice, so much time is spent just surviving day-to-day that you rarely
have the time or money to expand your practice. Sometimes you just need a lump sum to purchase new equipment necessary for the production of new work or to
tide you over after a bad show etc . It's a very up and down career so being able to access loans to help keep you going and improving is really important.
if the creative activities will provide financial income then a loan would be very helpful
I think it would be a good idea in principle, if the artist showed the commitment towards there craft
I think it's a great idea and necessary especially in light of current funding cuts being made by government in this particular public sector.
Very concerned that the timing of this research is so closely matched with the collapse of general public sector funding that any positive endorsement of a loan
scheme may be appropriated as a means of justifying cuts in arts funding.
The Princes Youth Trust awards loans but after you are 25 there is much less support. I never applied to the Princes Youth Trust because I didn't know about it
until too late. When I was leaving high school, and art school, there was little information on where to get financial support from outside of college.
Yes I would have used such a loan for buying large pieces of equipment although I would have been careful not to borrow too much - income always fluctuates and
high repayments on an inflexible basis might prove difficult.
As with all loans this would only be relevant where there would be a reasonable and quantifiable guarantee that the creative activity would generate a financial
return great enough to cover the cost of the loan.
I think it is an excellent idea. I am currently in the early stages of looking for funding to set up a dedicated textile/ weave studio/centre for excellence where people
can train in weaving without going to art school. Funding is the only way I will be able to achieve my goal
In my opinion loans are an easy way of getting into debt so would never consider them an option
Since there is very little teaching towards art/craft graduates making a living from their specialism's although this is a desirable concept it may lead to problems
Not a good idea: artists struggle enough. Research is key to enhancing and developing creative work and requires time, which cannot be spent trying to earn
money to reimburse loans. There is no such thing as a wealthy artist with a regular income...
yes, because as a self employed "creative" it is harder to get money/loans
Great idea. Keep the interest really low and repayments over a long period.
It's a good idea. But not for me, thanks
I think it is a necessary idea.
It is essential for high start up cost crafts, e.g.. glass blowing
Terrible idea -when I first heard of it I thought it was a joke. Disgraceful that this even being suggested in the current climate. Plenty of evidence from elsewhere it
perfect idea! Alas
In principle a good idea but as most artists get by on small incomes are you going to give assess creditworthiness in a different way from the banks
Only with good repayment terms.
for some it could maybe be good, especially if they are starting up a commercial project / a business - and/or have a very structured project with a set outcome. for
others potentially disastrous because there are no guarantees for commercial success in the arts and people could end up in debt if they get 'tempted' to take
loans... should not replace public funding for the arts, which needs to develop through creative freedom as opposed to commercial interests and output.
Yes, an excellent idea, as long as the practitioner/group is aware of the repercussions should they not be able to pay back a loan. (We artists often have our heads
in the clouds!) I've known other artists who are now deep in debt because the payback terms weren't thoroughly explained. Yes, this is their problem, but terms
This is not the time to encourage people to get into more debt! Also, unless you specify interest rates, the question is too open, how can one make a sensible
I think loans could be a very worthwhile idea, provided that the terms were generous and so long as they weren't replacing existing grant funding.
I think they are a good idea where they are needed
I have answered yes to the above but it would have to depend on how much interest it would cost and also I would probably only borrow for something I really
wanted. I am not to keen to borrow money as I still have student loan debt
In my experience artists rarely have the time to work and earn a suitably reliable income if they want to have sufficient time to pursue their art practice. It seems
ridiculous bearing this in mind, to think that offering a loan is the answer. It just means that individuals will be tied to debts they are unable to pay.
would depend on interest rate
Remuneration for artistic endeavour is so chancy that quality often bears no relation to 'success'. This means that loans to artists could result in accumulating debt.
I am fortunate in being able to subsidise my own work (both individual and charitable) from my pension, but I'd be much happier with a system of financial support
for artists that asked for repayment only if/when affordable -- though I recognise the danger that this might mean that only 'marketable' projects would be
Artists are not businessmen, we are not seeking to make a profit, merely to continue creating. Unless the work was commercially viable (in which case it wouldn't
need funding) there will be no, or very little, profit. Therefore no 'loan' could be paid back. Therefore the creative work would stop. In short, 'investment and the
like (rather than funding in the form of crafts and funding) seeks a return in financial terms, not artistic ones. so the only projects that would eventually get loans
would be the commercially viable ones that don't need support - while purely artistic ventures would simply go the wall. It is a terrible idea.
As the Co-Director of a small creative enterprise, loans specifically for our sector is a great idea. We are a profit making enterprise. This excludes us from a lot of
funding (i.e. grants/trusts etc) However we really need support to grow and deliver exciting projects. Our bank has been fairly supportive but as we are a
partnership we are not willing to take out a loan from the bank that would require us to put our own property up as a guarantee or become a LTD company at this
There is a wealth of talent in this country with limited access to resources and outlets. Imaginative and innovative work which is outside the parameters of grants
and not obviously a money-making proposition may benefit. On the whole I think it's a good idea as long as there is not a default of re-payments!
Loans for artists and creative organizations are not viable unless the creative activity generates a profit. Because the majority of British creative organizations
operate at a loss, the concept of loans for investment in creative activities shows a profound lack of understanding of the current creative landscape.
yes it is a good idea, because amounts larger than what one can get from personal savings can become available in one go, and this can make a difference in
terms of what the creative practitioner wants to achieve
BOP CONSULTING
Creative Financing: feasibility study into financial mechanisms for supporting
small-scale creative activity in Scotland - Appendix C
Could you write a short sentence describing exactly how you might invest a loan and how that investment would lead to a direct financial
return for your practice? (e.g. I could pay to have my pictures framed which would enable me to sell them at an exhibition..)
I could hire professionals to make a recording of some of my music.
Any funding would result in the ability to invest in better equipment and earn larger rewards
I could have a screen print washing unit fitted in my open studio which would allow both myself and my daughter who shares the studio to save on time and
print costs as currently until we get this facility we have to send work south for printing this also limits our artistic control.
I would invest it in securing recording rights to new up and coming artists, that I would then look to license to bigger record companies or indeed via my own
label
I would invest the money in recording collaborations centred around my record label which when released and sold would provide financial return for both
the label and the artists (of which I count myself)
I could have my music professionally mixed and mastered for sale by digital download on my website to audience build
I'd pay for the recording costs of my next album building on the success of the previous two and spend money on marketing.
I could pay to buy improved lighting so I could upscale my portfolio/client base.
As above, I need to prepare pieces for framing etc for an exhibition in September 2011.
I could use a loan to live on and pay for studio space in order to allow me to spend constructive time developing and honing my creative practice in order to
increase my future contribution.
It would allow me to pay for time of other individuals to help me produce my own products to take me away from my reliance on being a service based
company
Would be able to produce more if suitable premises found
I would be able to reduce the hours that I work in my part time jobs and devote more time to my practice hopefully to financial gain
training workshops in digital film editing, website design and maintenance, framing.
studying music therapy would enhance my skills and help increase my income
I could curate a contemporary cultural exhibition showcasing naive art from the diverse community.
I would purchase equipment and software which would enable me to work more efficiently therefore make a return faster
I could redevelop existing creative content from print format to interesting apps for sale via iTunes etc
We could develop our van that will be used as a major marketing tool for us.
I would be able to review my materials, marketing, and plans for new work and allocate the resource required.
framing, glazes and clay plus an opening evening
I'd hire a venue in London to stage an exhibition, and acquire the software I need for maintaining my website and documenting my work.
I might use invest the loan in to a stall or exhibition space to create more business, or in to a making a web site to reach more customers.
I could pay to have the loom shed watertight
Purchase Equipment / Digital Fabrication / Undertake Research
I could advertise workshops and seminars in hotels at a reasonable price for participants held in decent places to enable them to receive tuition in making
landscape pictures and allowing them to go forward in an artistic way without fear of criticism because the standard of teaching is informal and high at the
same time.
Investment in equipment, materials and studio space to commence manufacture of woven textiles, with some costs towards the establishment of website for
promotion and sales.
Manufacture CDs, allowing me to take advantage of lower prices for larger runs
would like permanent premises as competition shutting down
I could pay for advertising and marketing aimed at promoting my business, generating interest and increasing awareness of my business, hopefully leading to
an increased income
I could pay to buy photography equipment which would enable me to get more of my pieces on to my website
invest in tools to expand on the range of jewellery I make
I need CS4 Photoshop software to do my digital engineering at home, I also would benefit from a Mac computer for my digital designing. I would like to do
up my garage as a studio as I have no working space at home. Students and visitors could come and see my work and perhaps in the future I could have
workshops etc. I am also thinking of working towards my own exhibition perhaps another year.
I could pay to have my pictures framed which would enable me to have an exhibition and I could pay for any promotional material posters etc.
A website would allow me a wider audience thus additional sales
materials, short fine art print courses, framing for the selling of work
I could buy equipment to enable me to process raw fleece in a more efficient way
I could pay for website training to help with future advertising of my products.
I would spend some time without a part-time job to dedicate all my time and energy on an exhibition and buy the tools and materials relevant to do a good
job, plus good publicity for it.
It could sustain me while I write another book, and until monies from the previous ones come in - this could be particularly important in the case of
emergency outlay, such as vehicle breakdown & repurchase (which I envisage in the not-too-distant future!)
I would like to promote my published Scottish Writers books in a bigger environment, i.e. at a national or international event or venue.
If would 'buy' me time to research and write
I might invest a loan by using it to organise proper showcasing of the work that individuals have done to show them what is achievable and what they have
themselves achieved
probably where an inexperienced commission group could not release funding until a project was completed - which occasionally does happen.
Preparation, to create perfection of my art
I could put on a performance which would enable me to invite agents who could possibly find me paying work.
As stated previously would only buy equipment I could not afford to buy outright but that I would use throughout career and could get no other way based
on interest paid
I would be able to invest in training and time to develop my practice and work more frequently within the visual arts
Premises to work/store materials and hold classes.
To build a studio that would help me increase production and make more money.
I could invest in machinery which would assist me in producing more efficiently..
I could purchase equipment to make new work, and transport to increase opportunities of selling work at a greater number and broader range of creative
events.
It will lead to an indirect financial return only: invitation for new exhibition, new collective project, grant...
I could pay to have my pictures framed for an exhibition
I could buy into a group owned exhibiting space
I could use the money for start-up costs: first few months of rent, deposit, materials, and so on.
Purchasing printing equipment I would be saving at least two third of cost I now pay and I would make a substantial difference to my work practice.
I could pay to set up a hot glass studio which would enable me to make more work and stabilise my business.
I would borrow the money to buy equipment to enable me to developed my ideas, which would then sell as part of paying back the loan in return, also good
to put towards a specific training course which would then put me back in work in what I wanted to do.
I would put the money towards renting space for exhibition to show works and perform.
I would buy an A3 scanner or equipment for a mobile studio to photograph my artwork to make prints from and to send to publishing companies.
I could buy better machinery and materials to enable me to produce things quicker and bigger.
I would invest in a bigger kiln
To cover a cash flow situation. To pay for up front costs relating to a commission. To buy equipment.
It could enable me to buy the equipment which would allow others to prosper in weaving
I would use it for marketing, maybe paying a pr person and to finance travel, so that I could network and meet other agents/galleries in other parts of the
UK/world.
I would purchase specialised computer equipment and CAD software
To pay for framing of all my works to make them more attractive to clients to purchase at exhibition
It would enable us to take time out to develop and create new work without having to work other part time jobs to support ourselves in turn creating a body
of work to sell therefore bringing money back into the business
I could make a portfolio for gallery owners to view, hopefully leading to an exhibition
I would use such a loan to purchase lathe and wheels and sand etching equipment. These machines would enable me to bring my work to a higher level and
so attract a higher price.
I could pay for equipment which would enable me to create work independently, be more productive as a result, advance my career and in doing so
eventually become self-sufficient
upgrading my existing equipment and work presentations
new machinery would speed up production time
Self publish a book; frame pictures; buy materials
I could pay for equipment and studio space to enable me to start producing more work, that I could then sell
I might attend a course for developing a new or existing skill
provide a service that would create business sponsorship
We would use a small business loan to invest directly in the company. Securing the meagre salary of one of our Directors and our Intern for one year. This
would allow us to fully focus on the development of our business and projects.
I could buy a HD video camera, a new computer and editing software and most importantly I would pay the cost of a professional workshop to learn how to
use the new editing software efficiently
I would possibly pay for independent editorial input on manuscripts that are not yet ready for my publisher.
I could buy some recording and editing hardware/software and gain a workspace to be based from
I would buy better equipment and bulk buy supplies meaning greater product output and better profit margins
I wouldn't currently need to borrow any money
Get my website back up-and-running.
Enable me to buy much needed equipment-A3 scanner/ printer/ and materials for workshops
having fallen into financial difficulties following an accident at my full time job, I now owe money to WASPS studios, I feel very bad about this as they have
been patient with me. I would also be able to buy materials and get pictures framed, pay for website in order to further my practice and advertise my work
more effectively. if loan was at agreeable rate, this would be an enormous aid to my struggle to maintain my practice and sell my work. I would like to
especially pay off my studio arrears and other debts incurred since my accident as I wake up during the night worrying about these things amongst other
ongoing problems.
Picture framing for an exhibition, publicity materials such as private view cards to be printed and posted.
I could open a small shop or stall in order to work in and sell my artwork
Reconstruction of an additional building owned on-site would expand and enhance facilities.
pay for time away from my "paid work" to make new work with out compromise
To do something that would make a difference to my career
I would be able to pay myself for time spent writing applications for grants, which would then be reimbursed by these grants. Thus I wouldn't have to take on
additional work (non-art related) during these periods.
I could invest in tools or equipment to realise a project or rent a workshop for a period of production to realise a more ambitious project
Your example is exactly my need
Marketing to increase sales, stage exhibitions
upgrading digital equipment, which in turn brings in small hire fee from clients each time used on their project
development TV program
To buy a high quality digital SLR camera to document work which would enable me to market my work more effectively and gain more publicity to gain
commissions and freelance work
I would be able to fund a solo exhibition, cover costs of venue hire, printing and promotion etc.
Rent exhibition space to organise art fair for myself and new artists - charge exhibitors
I could afford to have more work professionally framed and exhibit . I could rent a better studio.
nope, I sold more of them before I started framing them!
I would have a range of kilt pins cast to support my bespoke designs and enable me to sell kilt pins "off the peg" at a lower cost therefore selling more and
making a better profit.
buy equipment to produce more efficient work
I could fund the recording and distribution of a CD, which would enable my writing and music to be more widely circulated without imperilling my family's
finances!
develop my practice and allow me time to move on
invested in writing time, pay back from royalties
I could pay for framing and travel expenses for exhibiting.
I could finance materials for larger pieces of work for sale in exhibitions
I could buy materials to make new work.
invest in kitchen hardware and equipment for food photography
I would pay to have more product sampling so that I had a stock from which I could sell and promote my product. I would also use it for fund a trade show
stand.
I would finish a number of publishing projects presently on hold because of work I have to do elsewhere.
I could pay for the publishing of a poetry collection which I could sell through reading events.
It would enable me to rent exhibition space and pay a collaborator which would enable me to raise my profile as a poet through an exhibition.
I could pay a designer/illustrator to design/illustrate publications
I COULD PAY FOR RESEARCH TIME AND COSTS TO DEVELOP THE FOLKLORE LITERATURE OF THE LATE DUNCAN WILLIAMSON, WHOSE ESTATE I HAVE
INHERITED.

Creative Financing Feasibility Study 2011

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Creative Financing Feasibility Study 2011

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Creative Financing:

feasibility study into

Final Report, January 2011

4.4.1 Demand for loans and market sizing estimates ............... 15

2. Introduction and methodology ...........................4

4.4.3 Qualitative findings .......................................................... 17

2.1 Study Background ................................................................ 4

4.5 Supply side consultation ..................................................... 18

2.2 Study Objectives ................................................................... 4

5. Financial Modelling Outcomes ........................ 21

2.3 Methodology ......................................................................... 5

3. Key findings .......................................................6

4. Detailed consultation and research findings ....10

7. List of Appendices ........................................... 29

4.2 Demand side workshop outcomes ...................................... 10

traders and small creative businesses, and more broadly on the

Demand for larger loans of approximately 5-20,000 alongside

Pending changes to legislation will enable credit unions to add

also have the opportunity to raise funds in this way. Some

Figure 1: Identified demand and matching recommendations:

Work with existing credit unions to develop

Loan funding delivered either in

Shetland Arts Development Agency

2.2 Study Objectives

Consultation workshops with arts member organisations

Financial modelling: Financial modelling of a loan fund

Supply side consultation: individuals working for public and

cultural sector bodies, credit unions in the UK and Canada and

3.2 Level of demand

If delivered with accompanying business skills training and support, the

A list of 121 qualitative statements left by consulted creative

Figure 2: Size of loan required by consultees

3.3 Nature of demand

For the purposes of this study, very interested is a score of 8 or 9 on a scale of 10

Workshop consultees and online survey respondents cited a range of

I could pay to buy improved lighting so I could upscale my

3.4 Supply side outcomes

Perspectives gathered concerning the proposed schemes viability

Many social investors already cater for creative sector businesses to a

3.5 Financial Modelling outcomes

respondents stating a need for 1-3,000. Conversely, 20% of

4.2 Demand side workshop outcomes

The purpose of the workshops was to engage with organisations across

What type of projects do artists currently use loan funds for?

How do artists currently fund work and what is the mix of

What other types of help and support do artists need to make

Workshop attendees also supported the on-line research process

was suitable for a creative industry audience, and then helping to

Figure 4: Workshop attendees

Creative Financing Workshop Attendees

Loans to cover small capital projects such as studio

Putting on events such as concerts and exhibitions in situations

Materials for commissions. Consultees stated that when

Training and CPD. Consultees stated that training and CPD

Costs of attendance at trade shows. Similar to putting on

Production costs for an album. Loans could be used for studio

Cultural Enterprise Office

Types of projects appropriate for loan style funding, existing and

was acknowledged that investing in self production is risky as

Self-publishing. Similar to producing an album, self publishing

Replacing damaged equipment and machinery. In some cases

IT equipment was cited as a priority for many. Computers,

Marketing materials. Many consultees felt that marketing and

How artists currently fund work and problems with existing