The coronavirus pandemic has affected nearly every industry thought of, including the music community. With COVID-19 safety precautions put into place, Alex Heiche, CEO of Sound Royalties, has remedied a way for artists, producers, and songwriters to still be able to thrive.
Sound Royalties is a specialty music-finance firm that is looking to enable creatives with a $20,000,000 fund. Artists impacted by the virus can obtain no-fee royalty advances. In addition, applicants need at least $5,000 in royalty streams to be considered.
“I started Sound Royalties because I was a creative growing up,” Heiche shared with HipHopDX. “I played half a dozen instruments, I was training on the piano, and it all started there. As time went on, I took a turn for software and specialty finance and then eventually decided I wanted to come back to music with my knowledge and ability to be able to make a difference.”
“I started the fund a number of years ago when I saw a need in the music community for funding and financing that was operated like a traditional bank but didn’t have the constraints of traditional banks that they sometimes have,” he explained. “We wanted to understand royalties from the top of the organization down and be able to provide funding where others couldn’t. But we also wanted to operate like a bank, we don’t buy copyrights, we don’t take them.”
Sound Royalties chose to do more than just donate to the music community during this time. It decided to leverage the difference between what it would be able to donate and what it could be able to provide at a no-cost, no-fee funding.
Comparing Sound Royalties’ approach to other companies, Heiche shared why his business is unique, “This is something that’s never happened before.” he said. “The impact in the industry is enormous and we wanted to do what we could on our part to try to help creatives in need … so we had the choice of making a sizable donation. If you think about it, donate $600,000 to $800,000? Or provide $20 million of no-cost funding for a year? It costs that much to be able to allocate that kind of money for that period, so we decided to do the latter.”
A list of clients that Sound Royalties have worked with include Wyclef Jean, DJ Khaled, Lil Wayne, and Pitbull to name a few. It aims to relieve as many creatives as possible but there are eligibilities that have to be met. “It’s for creatives,” he went on to explain, “Songwriters, artists, producers, composers, independent publishers, and labels that are earning at least $5,000 a year in royalty income, all the way on up to earning millions of dollars a year in royalty income are eligible.” Heiche also guaranteed that eligibility for funding does not depend on personal financial history.
This particular no-cost, no-fee advance fund has a repayment period of one year, however, there are other programs available that offer an extended repayment period, according to Heiche. “We also offer programs that go up from three to five years and we’re waving our closing fees on those right now. We have a wide variety of programs that suit the different needs of every creative.”
Without an end to the quarantine near, Heiche declared that there will be no penalties for creatives who may not be able to repay their advance within a contractual year. “Under no circumstances, will creatives lose their copyright and we’re not asking for personal guarantees,” he said. “We’ll look at everything as we always have on a case by case basis. We’re here to help, we’re not here to hurt.”
As social distancing precautions continue to expand, Sound Royalties plans to expand its program another 30 days to accommodate the circumstances. Responding to the reactions that their program has received, Heiche went on to say, “We started this a few weeks ago and we’ve been blown away by the response. We got in early and got out early and tried to help as quickly as possible, however, the crisis has since expanded. So yes, we’ve expanded the program.”
As per Heiche, despite the pandemic, the no-cost, no-fee advance royalty funding will only go on until May 16. “At some point, we have to think and operate like a business to continue to be able to help creatives on an ongoing basis.”