Faster Payments

Fast Royalty Advances Keep The Music Playing

The global music industry is expected to generate $57 billion in 2021. But those artists creating the songs can struggle to stay afloat while waiting for royalties. In the Faster Payments Tracker, Lyric Financial explains how it quickly provides royalty advances to cut the wait, with Same-Day ACH transfers in the U.S. and integrations supporting direct ACH internationally.

While songwriters and independent music artists may be the foundation of their industry, they often struggle to keep their own finances running smoothly.

Income is unlikely to be a steady salary, instead earned from royalties generated when their originals are performed in public, digitally streamed or sold, among other uses. That revenue is typically disbursed on a monthly or quarterly basis from a performing rights organization (PRO) or another group charged with collecting and tracking royalties on an artist’s behalf.

Unstable cash flow can be a big problem for talented artists. They face long waits to accumulate enough funds to afford the things they need to do, which can include renting a recording studio, filming a music video, setting up a performance tour and hiring a graphic designer for band posters, among other business expenses.

Thankfully, some financial players are taking an interest in helping artists who struggle to get fast access to funding. In a recent interview, PYMNTS spoke with Dawn Griffith, director of operations for Lyric Financial, about how the financial services company works to provide speedy royalty advances to support independent music artists.

“Artists are pretty much independent contractors,” Griffith noted. “They don’t have a regular source of income like a paycheck coming in. It’s very important to them to have continuous cash flow, but because of the way royalties and distributions are reported, there’s a delay in that processing.”

Making Musicians’ Money Move

Independent artists often find themselves turning to borrowing-based financial solutions, which can be risky. In fact, some songwriters must take out loans and sometimes put their songs up as collateral, according to Lyric Financial’s website.

Hoping to better appeal to such artists and get them on firmer financial footing, the company offers advances, typically based on one year’s worth of projected royalties. It estimates royalties based on data like earnings history and collects them until the advance is paid off — with no songs held as collateral. If projections are accurate, these advances mean companies are only funding artists for amounts they’re due to receive anyway, putting the funder at less of a risk. In addition, artists’ credit scores do not impact whether they are approved, according to Lyric’s website.

“Creating this advance system has given artists the capability of getting money they’ve already earned before it’s actually paid out,” Griffith said. “It helps them with [everything from] getting in the studio to finish projects to shooting videos to getting Photoshop done — everything to run their businesses.”

Lyric Financial relies on ACH to quickly deposit funds into clients’ bank accounts around the world. It has also embraced same-day ACH in the U.S. to provide same- or next-day receipt.

The company integrated with a third-party provider to support international clients and handle international advance disbursements. The process uses direct ACH to send funds into foreign countries and convert them into the desired currency. It can take anywhere from 24 hours to three days for money to hit the client’s account, Griffith said, adding that it was important to find a provider that would support ACH instead of the more expensive bank wires.

At present, Lyric Financial only delivers advances into bank accounts, though artist clients have an interest in receiving funds via PayPal — a platform many already use regularly.

Faster Tempo for Associated Processes

Achieving payments efficiency isn’t just about quickly moving money along payment rails. Other processes must be completed — and fast — before the gates can be opened and funds moved.

Advance requests need to be handled quickly, and Lyric seeks to handle this with a virtual ATM platform that enables artists to track their earnings and submit requests for advances within one minute. Advances can be for up to $100,000, depending on the client. With the company’s processes, advances requested through the portal can be delivered into accounts within 24 to 48 hours of the artist’s royalty organization approving it, Griffith said.

That’s not the only area requiring speed, though. The company found that quick customer service response is highly important to its clients, too.

Still, lags remain in the system. Lyric does not process requests for advances on the weekend, for example, but it is currently exploring automation to both enable processing on weekends and provide same-day cash receipt.

As Lyric Financial continues to promote its solution and implement new features, it hopes that an alternative source for business capital will be music to songwriters’ ears.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.