Advertising: financing options for self-employed photographers

Raising money for new equipment: This is how it works!

Millions of smartphones are no competition for professional photographers. On the contrary, the variety of photos promotes their value as an important private memory or as a central element in marketing. In purely formal terms, entering the profession of photographer is simple. The designation has not been protected for several years, no special training is required. Who wants to be successful, needs however at least a load-carrying concept – also regarding the financing.

Almost no chance on common online platforms

The purchase of photographic equipment that meets professional standards goes into the money. For a full-format DSLR or DSLM with a basic equipment of lenses a five-digit amount is due. Used it goes perhaps also somewhat under it. Depending on the field, other hardware may be added, mobile lighting solutions, a tripod or a drone, for example. A studio can be rented for the beginning, until regular income allows a reinvestment in lights, radio-controlled flashes, backgrounds, macro sleds and the like. The savings will not be sufficient even for a start with small equipment however often.

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 solid income. The reason is simple: the portals receive for the credit switching of the banks a commission. But they only pay if the business is desirable. Loans for freelancers and professionals are not included because of the higher risk of default. However, there is one chance: those who start self-employment as a photographer as a sideline and maintain a sufficient income from a permanent employment contract can get a personal loan. About 1.000 EUR disposable income should be enough.

Alternative credit options

Of course, branch and online banks also offer loans for self-employed people. Such financing can be researched on the internet or by telephone. When looking for suitable financing, interested parties should in any case also consider

The most well-known promotion bank is the kfw (in former times credit institute for reconstruction). It manages, among other things, 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 start-up as a photographer. Kfw supports the collateralization of the loan and thus makes it easier for the house bank, through which the loan runs, to make a positive decision. At vexcash there is the possibility to get a loan for self-employed 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. Coal for creativity there is above all for music and film productions. Unfortunately, it is not quite so easy for photographers who want to become self-employed to use the relevant platforms. Private lenders are more flexible when it comes to underwriting guidelines, but they make the default risk associated with lending pay with interest rates sometimes well over 10%.

In addition to the major comparison portals, there are numerous credit intermediaries that find financing options specifically for customers with medium or even problematic creditworthiness. Since they do not have to expect any commission from the bank for the mediation, it must be paid by the prospective loan customer. Serious intermediaries agree exclusively on success fees. If no loan agreement is concluded, no fees should be charged.

A business plan is obligation

Whoever the potential funder is, he will want to see resilient information about the intended photographic activity. It is important to prove several mainstays, without getting bogged down. An exclusive dependence on assignments as a wedding photographer, for example, is disadvantageous, but a photographer's homepage that shows motifs across many areas of photography will discourage customers who are looking for a specialist. But it is important to show an alternative source of income in case of a lull in orders, for example in a related creative profession such as web designer.

Get cash flow under control

One of the main problems at the beginning of self-employment will be the highly 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 due bills cannot be paid. Instead of cashing in on silverware in the form of equipment in the short term, short-term bridging loans are an option for this situation. You can't finance a studio with specialists like vexcash, but if you're a few hundred euros short for photo paper, they're easy to get, even for self-employed people, without any major formalities. 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.