Time to get Creative when financing kit in 2023

Time to get Creative when financing kit in 2023

Time to get Creative when financing kit in 2023

Rebecca Price, Director, Creative Vision Finance (CVF)

Introducing Creative Vision Finance (CVF)

Creative Vision Finance (CVF) was launched in 2021 at a time when the creative industries were still coping with Covid and lockdowns. It was a difficult period for many people in the industry, with a lot of the traditional routes to finance kit purchases either drying up entirely or proving to be too difficult to access while the amount of work in the industry was in such flux.

Our argument was that the creative industries need finance that understands the technology that powers them and the way that they work too. A high-end digital camera is a serious investment for any rental house or individual, and it is one that conventional lenders often fail to understand. Why spend that much money when there are cheaper alternatives available? What do you mean you have to spend 20% again on a shooting kit to make it work properly? Why does your income always drop in January and February?

Bridging the Gap Between Creatives and Financiers

The questions are endless and people often get turned down for finance because the lender does not grasp the business case for the equipment in question or the quirks of the way our industry is set up. That’s why we’ve worked with a large range of financial institutions to educate them on the subtleties of our industry and act as a broker between the creatives and the money men. You can think of us as translators; we speak the language of both sides and can interpret between them. And when for example interest rates are approaching 30% for a credit card and 15% for a bank loan, but are only around 10% for a properly constructed finance deal, you can see the advantages we bring.

Canon c70 CVP

Even more, when the established banks view the risk as too great but we know the business and the nature of the opportunity we have our own funds that we can use to help underwrite purchases. This is often the case for startups deploying new technology, with a good current example being something like a purpose-built virtual production studio using LED volumes.

The financial landscape in 2023

Two years after we started it has to be said that the financial picture is decidedly mixed. After an initial boost as we came out of the pandemic last year, there are both industry-specific and macroeconomic global headwinds that are making life difficult for many people. Interest rates are higher than they have been for a long time, and commissioners are being more cautious, though the amount of content being made is still considerably higher than it was before the current growth in the streaming side of the business.

Cashflow often determines the success of businesses

Our advice? Remember cash is king, and that the difference between businesses that thrive and those that don’t in this sort of climate is often cashflow. Whether you are looking to expand or upgrade with new equipment or not, the best place for money that you are owed is in your account. That means you have to be rigorous with your credit control and both think about prioritizing jobs that will pay fast and chase laggards who are dragging their feet. Having a full slate is nice, but having money in the bank is of critical importance, especially if you are looking for finance.

What kit are you going to spend the money on?

What to spend the money on? Without a doubt the single most popular piece of kit out there at the moment is the ARRI Alexa 35. We have seen sustained interest from rental house clients ever since it was launched and now that they are close to fulfilling their initial wave of purchases we are seeing individual camera ops starting to purchase them too. The camera is also a good example of why high street banks find funding such purchases challenging: the base price is just shy of £60k though you have to be spending over £70k to have something that you can work with on set.

RED V raptor CVP 

Get your next shot with a Red V raptor with cash from CVF

Elsewhere the RED V-Raptor, the Canon C70, and the Sony FX6 have all been popular recently, with the latter in particular starting to shift numbers now that its supply issues have eased since last year. And, as always, lenses tend to hold their value well. That means they are seen by everyone — and lenders in particular — as safe investments, canny ones sometimes too. Seven years ago you could get a set of Canon K35 primes for around £40k; now they’re worth about £150k.

Sony FX6 CVP

Of course, not everything is going to realise that sort of return. But if you are looking to purchase new equipment this year, remember to keep your cash reserves high even if you’re not planning to use them for finance, and talk to people who understand your business and your industry. That gives you the best chance of getting the deal you want for the kit you need.

 

CVF finance

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