Music Credit Fund will provide 'flexible finance' to rights holders without losing their IP

 

By Emmanuel Legrand

Former Association of Independent Music (AIM) CEO and Chair Alison Wenham andie:music Co-Founder and Chairman Tim Clark have joined the advisory board of London-based Music Credit Fund (MCF), a music finance company whose focus is to offer flexible finance for companies, artists, writers and producers in the music industry with IP rights staying with the owner.

  Music Credit Fund (MCF), which was launched by Jack MacDonald, Managing Director of Alvarium Investments, will offer long-term, competitively priced loans secured solely against intellectual property assets and/or future income streams across all music industry sectors. 

  The company announced that with a $2 million minimum borrowing threshold, MCF will allow any holder of music rights "the opportunity to realise value via a lump sum loan whilst retaining control, via 5-10 year loans at competitive interest rates with no personal guarantees."

Recognise music as a value asset

  Wenham explained that while at AIM, some 20 years ago, the organisation already noted "the lack of access to appropriate forms of finance for established companies looking to grow or restructure." 

  In conjunction with the DCMS, AIM produced a report in 2001 entitled 'Banking On A Hit', showing that music was a valuable, long term asset, but that companies were limited by lack of access to finance to help them grow.

  "Now that music has finally been elevated and recognised as a very valuable asset, with sales of catalogues being reported every week, it is high time to offer an alternative to losing rights forever," said Wenham.

An attractive alternative

   MCF will offer what it calls "a new and attractive alternative to the owners of intellectual property in music" based on certain principles:  
  > Control: IP remains with the holder of the intellectual property holders, allowing to positively monetise rights in a manner of their choosing;
  > Upside: Any potential future upside from music rights remains with the rights-holder;
  > Flexibility: Borrowers are able to borrow what they need over a timeframe they prefer;
  > Attractiveoffering: Existing lack of specialist lenders means terms often do not match what intellectual property holders seek.  

  MCF said it will provide a "particularly attractive alternative" for individual songwriters or artists who prefer to retain ownership of their personal creative output. For companies, MCF funds can be used "for any business-related purpose such as acquisitions or business development."

  Wenham and Clark will have responsibility for music industry relations.