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FACTOR Recording Loan Applications


INTRODUCTION

FACTOR is a Federal Government program developed by the Ministry of Heritage. The program funds production of commercial sound recordings through grants and loans. It also supports touring, showcasing and attendance at music conferences.  There is also money available for songwriting and music video production. Applications are made by submitting an application form enclosing a demo, bio, photo and detailed budget. At a certain level, record labels may apply for Direct Board approval of projects.

The most common FACTOR application for independent artists is the Juried Sound Recording Loan Program (FACTOR Loan and Independent Recording Loan). The award is up to $15,000 for non-distributed artists and $25,000 for distributed artists. With success rates for this program ranging from 3-8% of applicants, it is important to go into the process with every base covered. The vast majority of rejections result from one or more weak links in an application such as a poor photo, poorly drafted bio, generic marketing plan or weak demo. Applicants must realize that they are competing with the entire country for these limited funds.

BASIC REQUIREMENTS

Going into an application, an artist should put the following together:

  1. Two or three song professional quality demo;
  2. Professionally shot artist photo;
  3. Well written biography;
  4. Press clippings;
  5. Marketing plan – this is a key component and must be very well thought out. The key is to be detailed, specific and show that you understand music marketing;
  6. Letters of support from industry professionals;
  7. Passport or birth certificate (must be Canadian Citizen or Landed Immigrant to apply – if majority of the band are Canadian that is fine, but non Canadian costs will not be recognized);
  8. Lyrics for the demo songs submitted;
  9. Titles of the songs to be recorded including songwriter names and Public Performance Society (SOCAN);
  10. Letter from producer agreeing to produce the sound recordings;
  11. Producer discography including top three artist sales figures;
  12. Studio(s), rates, studio owner’s name, address and phone number;
  13. Photographer’s name;
  14. Artwork producer;
  15. For FACTOR LOAN, a signed national distribution agreement;

Whether or not the artist hires a consultant to help with the application, the artist will still have to supply the above list of materials. For the marketing plan, it is important for the artist to have all past successes documented including live performances, tours, radio play, media support, online activity, videos, personal appearances, awards and any other noteworthy stories. This is important to give the marketing plan context and to create building blocks for the plan.

DEMO

When submitting demos to FACTOR, consider that every indie artist in Canada is trying to get funding. An artist should only submit very good quality professional demos. A FACTOR jury has many artists to go through in a three hour period. Most artists are lucky to get a verse and chorus of a song listened to before the jury moves on.

FACTOR juries are genre specific which means that FACTOR has rock bands being adjudicated by rock juries and pop artists being adjudicated by pop juries. With many artists today, the genre lines are blurry. The best bet is to pick a genre that will best “get” your project funded.

Key considerations in demo production that can sink artists are things like instrument tuning, vocal pitch, poor performances, bad mixes and other technical issues. Don’t give the jury a reason to reject the artist. Make every part of the production the best it can be. With home studios and Pro-Tools, there is no excuse for shaky takes. Take your time and get the best performance possible.

MARKETING PLAN

Other than the demos, the second most important part of a FACTOR application is the marketing plan. Many artists fall into the trap of taking a previously drafted marketing plan and simply changing it around a bit. This method is not successful as the jury will see through generic marketing plans. To be successful a plan has to show a specific connection to the artist – every plan is different and needs to be tailored to each individual artist.

Basic elements of a marketing plan include:

  1. Demographic and sales projections (identify market);
  2. Touring and live performance plans;
  3. Radio servicing and tracking;
  4. Online marketing strategy;
  5. Film, television and video game placement strategy;
  6. Distribution plan and retail promotion;
  7. Press and publicity plan;
  8. Merchandising and other income streams;

When drafting a marketing plan, an artist needs to ask the question: how am I going to advance my career with the sound recordings funded by the FACTOR Loan? Each part of the plan needs to play into an overall strategy for success. Specificity is a key component of the plan. It isn’t what any artist would do, but what this artist would do to succeed. This means looking at the artist’s past record and building on those successes. For example, merely stating that “the artist will service to all AAA, Hot AC and AC stations” is too generic. Instead say something like, “the artist has received feature rotation on the Peak FM in Vancouver, BC. The artist plans on using this existing relationship as a launching pad for the radio launch of the artist’s first single.” Taking past success and using this to build a story is a critical component of the marketing plan.

Artists are encouraged to put a lot of creativity into their marketing plans. Juries do not have a lot of time to read through huge marketing plans, but creating a table of contents and tabs are very helpful. Also, the look and feel of the marketing plan should be good. Use pictures, charts and diagrams to enhance the presentation. Pretend that you are making an application to a bank for a bank loan for a business. What would you do differently? If a jury sees a very well put together marketing plan there is going to be the automatic response that the artist is organized and will follow through with their promises. Be as professional as possible. Typos and other grammatical errors must be corrected. Again, don’t give the jury a reason to reject you.

PROCESS

Applications are usually made online at www.factor.ca. All parts of the application are digital, so the demos must be MP3s (any bit rate), the pictures JPEGS, the bios PDFs or Word Docs, etc. If any part of the application is missing, then the application will be bounced. Sometimes FACTOR will call for small deficiencies, but don’t count on that. Check and re-check the required list of attachments and make sure that all parts of the online application form are filled out. Note that some of the sections may state it is complete even though something may be missing.

Expenses incurred any time after the application is submitted are eligible. No expenses incurred before the application is submitted are eligible nor are cash payments. Only Canadian costs and expenses are eligible. An artist can use a foreign producer, but the producer fees cannot count towards the budget.

FACTOR now covers 75% of the costs of production; however donated services have been dropped. Therefore the artist/applicant is responsible for securing 25% of the funding for production.

The Juried Sound Recording applications are loans repayable at $0.50 per CD and $0.05 per download over two years. Semi-annual reporting after release is required for two years and then the balance of the loan is forgiven. 50% of any repayment can be used for other applications as a “repayment dividend.” This incentive program was just reinstated. Failure to report, even no income, will result in default and the artist/applicant would be responsible for paying back the entire loan.

To pass through the jury process, an artist must successfully be approved by two genre specific juries (three to five jurors) and then the super jury. If an artist does not make it through genre specific juries, the artist will be rejected and given a feedback sheet. If it passes the second jury, then the artist will be passed on to the super jury. The super jury is a 10-12 person jury which adjudicates all of the applications which passed the genre specific juries. The theory is that the super jury consists of at least one representative from each genre to ensure that genre interests are balanced. All juries are decided by majority voting.

If an artist is lucky enough to get through the jury process, then the application will be taken to the FACTOR board of directors who will look at the application and the budget to determine how much the artist will receive. This is the first time that anyone other than staff has looked at the budget, so artists are cautioned not to bother trying to impress juries with budget issues. A common myth is that lowering budgets will give an artist a better chance. This is not the case as the juries do not even see the budget. Note that the board is known for adjusting budgets. Make sure that the budget is within normal industry standards e.g. don’t go over AFM scale for musician’s fees.

Once approved, the artist will be sent a confirmation letter which must be returned right away. FACTOR will then send a contract. This contract must be signed properly and then returned to FACTOR. FACTOR will then send 50% of the FACTOR portion of the budget. The artist/applicant will not be able to secure the balance of the funds until all invoices and a completion certificate are completed.

Artists can use consultants to apply for FACTOR loans and grants. There is a built in $1500 non-invoiced administration fee built into the budget. Artists who have never completed a FACTOR form are encouraged to visit Music BC, the FACTOR affiliated office for BC, to discuss their application with Music BC staff. If the artist feels that there are areas that they do not understand, then the artist can hire a consultant to fill out and submit the FACTOR application. Prices for this service vary. Artists are advised to ask a lot of questions of any consultant. Will my marketing plan be unique? What is the consultant’s track record – how many artists have been successful? How many have made it to the super jury? What qualifications does the consultant have for claiming to be an expert on FACTOR applications?