Loans
It's generally very difficult to raise money for the arts. The best source of funds is grants from private organizations or government programs. Banks generally will not lend to new arts organizations. The second place to look is friends and family.
Another place to look is loans that do not require credit. You will see installment loans and payday loans advertised as options. We do not think these are a good option for arts funding.
We feel the best option for funding an arts program is Kickstarter. This site lets you put up information about your program and then people can contribute.
In case you are interested in installment or payday loans we provide more information below.
Installment Loans
Installment loans are shorter term loans for individuals with poor or no credit. These loans are unsecured and linked to your payday. These loans are fairly easy to get but they are very expensive so should only be used for emergency short term funding.
Payday Loans
Payday loans are simple loans that can bring cash into your bank account very quickly and sometimes overnight. The do not require a strong credit history. In fact they do not rely on credit at all. As a result they are very expensive and if you are able to get money from banks, credit cards, friends, or family they are a much better option.
What Are Payday Loans
Payday loans are based on your pay check. A lender will hook your payments directly to your bank account. Then when your loan is due they will automatically deduct your payment from your account. Typically a payday loan will cost anywhere from $10 to $45 per $100 borrowed so you can see they are very expensive lending option. Typically once approved for a loan the payday lender deposits money into your checking account. Your payment is due at your next payday. If full payment can't be made then payment is made and the loan is done. If you can't pay the loan many lenders will let you renew but this is a very dangerous option and one that is often encouraged by payday lenders because they make a lot of money doing this. You will end up paying fees on your fees.
Vicious Debt Cycle
Payday loans can lead to a vicious debt cycle. In the end many borrowers may end up owning significantly more in fees than they originally borrowed. Thus, if you are going to take out a payday loan make sure you pay it back when it is due and do not renew the loan. This mean a payday loan should only be used in an emergency to cover short term needs. They should not be used for non-emergency situations.
Direct Lenders Or Matching Service
If you search the internet you will find a lot of installment loan and payday loan sites. The thing is most of these sites are not lenders. Instead they are matching services. These sites take your application and then sell it to numerous lenders. In some ways this services is good because with one application you can apply to a lot of lenders. The downside is you have no idea to whom your information is going. In addition you are unable to select which lender you want. In other words the matching service most likely sells you to the highest bidder so you don't necessarily get the best deal.
You can tell a matching service from a direct lender by reading the fine print. All matching services will have a disclaimer on the bottom that says we are NOT A LENDER. If you want to use a direct lender make sure the disclaimer does not say this.
Installment Loans Or Payday Loans
The difference between an installment loan and a payday loans is that the payments for installment loans are spread out over time. Having the payments due over time reduces the payment amount and APR but it does increase the total amount of fees compared to a paydya loan paid on time.