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When to use business credit for a Record Label

If you’ve started an LLC, you likely want some business credit to make a few plays. But when do you use it, and why do you need it?

This is a financial learning curve for most, which is why many are afraid to attempt using it. However, you shouldn’t feel that way because credit seasons you to handle bigger investors.

Merchandise Play

As long as you run your numbers and know your followers-to-email-subscribers ratio, fronting the cost via a credit card is a great time to use business credit. It’s a simple flip: buy the merchandise, sell the merchandise.

Tour Play

Touring is similar but comes into play when you know the number of potential ticket buyers in the market. This step takes a bit of planning. You want to ensure the costs you’re fronting are solely based on the venue buyout and getting tickets sold. Do not spend money on gear and equipment for the show if you don’t foresee selling enough tickets to cover the cost of the gear purchased.

Do Not Use Credit for the Album

You should never use credit for the album because this is the last thing that will break even or recoup its costs. You will be stuck with a bill that you have to pay.

Do Not Use Credit for Videos

If there is no direct source of income for the use of credit, don’t finance it. Music videos fall into the same category as the album. Music videos are promotional materials and should be financed with cash!

Your Credit Score Is Important

Unless you can pay it back in 90 days or less, don’t use the credit. To keep funding flowing, we must be responsible with our business credit score.

What Should I Do First with the Credit?

Use it to protect the money in your bank account and fund your monthly expenses.

In Any Situation, When Do I Use the Credit?

I’ll reiterate: ONLY USE CREDIT ON A FLIP!

When Should I Get Business Credit for the Label?

When you’ve got some opportunities to make a flip!

How Much Credit Should I Have on Hand?

As much as you need to make your flips. However, it will take some time to build the business credit profile, so this isn’t a race to accumulate a bunch of credit with no chance to use it to build, grow, and expand. Don’t let YouTube blow your head up about how much money you can have on hand. The business of everything comes first.

Check This Out!

If you're a music creative or executive looking to build your label or publishing company in 60 days or less, grab the 60-Day Record Label Course and get it done today! You’ll gain the ability to get real funding, avoid contractual pitfalls, and keep the middleman out of your pockets. Click the link below to get started now! If you’re skeptical, grab the free guide, "10 Ways to Increase Your Record Label Profits," which comes with a free split sheet download.

If You Respectfully Use the Credit

  1. You’ll be able to build your business faster than always using cash.

  2. You’ll gain the momentum as an artist or label that you were looking for.

If You Misuse the Credit

  1. You’ll put your label in the toilet so fast your head will spin.

  2. You’ll probably never be able to get out.


If you were struggling with:

  1. When to get business credit,

  2. What to use the business credit on,

  3. And what not to do with it,

You now have the means to understand how to implement this better than most just starting in this business.


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