Advertising: Financing options for self-employed photographers
Millions of smartphones are no competition for professional photographers. On the contrary, the large number of photos promotes their value as an important private memory or as a central element in marketing. Purely formally the entrance into the occupation of the photographer is simple. The designation has not been protected for several years, a special training is not required. But if you want to be successful, you need at least a viable concept – also with regard to financing.
Almost no chance on common online platforms
The purchase of photographic equipment that meets professional standards is expensive. For a full-frame DSLR or DSLM with a basic set of lenses, a five-figure sum is due. Used it goes perhaps also somewhat under it. Depending on the specialty, additional hardware may be needed, such as mobile lighting solutions, an elevated tripod or a drone. A studio can be rented for the beginning until regular income allows a reinvestment in lights, radio-controlled flashes, backgrounds, macro slides and the like. The savings will be even for a start with small equipment but often not enough.
Favorable loans do not seem to be a problem in times of low interest rates. Who looks around however as existence founders with the usual comparison portals, becomes disappointed. The offers apply practically exclusively to employees with a solid income. The reason is simple: The portals receive a commission from the banks for the credit mediation. But they only pay if the deal is desirable. Loans for freelancers and tradesmen are not included because of the higher risk of default. However, there is one chance: If you start your own business as a photographer as a sideline and maintain a sufficient income from a permanent employment contract, you can get a personal loan. Around 1.000 EUR of disposable income should be enough for this.
Alternative credit options
Of course, branch and online banks also offer loans for the self-employed. Such financing can be researched on the Internet or by telephone. Prospective buyers should also consider the following when looking for suitable financing in any case
The best known funding bank is KfW (formerly Kreditanstalt fur Wiederaufbau). Among other things, it manages funds from the European Recovery Program (ERP), better known as the Marshall Plan for the reconstruction of Europe after World War II. The StartGeld (ERP Grunderkredit, product 067), for example, is available up to 100.000 EUR also for a part-time business start-up as a photographer. The KfW supports the collateralization of the loan and thus facilitates a positive decision for the house bank, through which the loan runs. At Vexcash there is the possibility to get a loan for self-employed people up to 3000 Euro.
Especially in creative professions, private loans, so-called peer-to-peer loans (P2P loans) or crowdinvesting are now established forms of financing. Money for creativity is available above all for music and film productions. Unfortunately, the use of relevant platforms is not quite so simple for photographers who want to become self-employed. Private lenders are more flexible when it comes to underwriting guidelines, but the default risk associated with lending is paid for with interest rates sometimes well above 10%.
In addition to the major comparison portals, there are numerous credit brokers who can find financing options specifically for customers with average or even problematic credit ratings. Since they do not have to expect a commission from the bank for the mediation, the prospective borrower has to pay it. Reputable intermediaries agree on success fees only. If no loan agreement is concluded, no fees should be charged.
A business plan is mandatory
Whoever the potential funder is, they will want to see robust information about the intended photographic activity. Here it is important to demonstrate several mainstays without getting bogged down. An exclusive dependence on orders as a wedding photographer, for example, is disadvantageous, but a photographer homepage that shows motifs across many areas of photography will deter customers who are looking for a specialist. However, it is important to show an alternative source of income in the event of a lull in orders, for example in a related creative profession such as web designer.
Getting cash flow under control
One of the main problems at the beginning of self-employment will be the very fluctuating and staggered cash flows. Expenses are incurred long before the associated income flows in. The latter are extremely volatile, depending on the order situation. Insolvency can occur even without overindebtedness if bills that are due cannot be paid. Instead of turning silverware into cash in the short term in the form of equipment, short-term bridging loans are an option for this situation. You can't finance a studio with specialists like Vexcash, but if a few hundred euros for photo paper are missing, they can be obtained quickly even for the self-employed without much formality. The low sums and limited duration of such loans, usually between two and six months, limit the risk for the lender. The interest rates for mini-loans are usually high, but due to the small amounts, the burden in euros is hardly significant.