Art of Business: Introducing Hoverboard Finance
Jeremy Wortsman and Rachael Hart, Co-Founders of Hoverboard Finance. Photo: Simon Eeles
Guest Work Agency is your go-to source on art business – we want to provide you with useful insights, resources and tips on the day to day running of an art-oriented business.
In this Art of Business story our friends Rachael Hart and Jeremy Wortsman, co-founders of new art finance start-up Hoverboard Finance, share their innovative solution to the challenges of being paid on time for creative work.
There are few things more stressful for a budding creative freelancer than waiting to be paid. It makes managing cash flow difficult, tightens the leash on what jobs they can and cannot afford to do and, sometimes, it can create tension with the client. As artist agents, we know this story inside out. Through our two creative agencies—The Jacky Winter Group whom represents illustrators and Hart & Co. who represent photographers, stylists and hair and makeup artists —we’ve secured countless commercial projects and worked with some of the biggest global brands. We understand that financial stress is one of the major driving forces behind brilliant creatives leaving the industry before they’ve even had a chance to sink their teeth in.
Over the last few years, we’ve noticed debt-factoring businesses are slowly on the rise. In the Australian art market for example, a number of services are cropping up that aim to benefit the collector and the creator through generating and maintaining structured payment systems. Generally speaking, these systems are built to guarantee immediate payment, while providing the purchaser with the opportunity to adhere to longer payment terms. We’ve seen it emerge in the US and the UK, too. In the US, we’re starting to see larger production houses borrow entire budgets from specialised financiers, accepted purely off the back of a purchase order when agencies are unable to front-up expense advances. It’s a system that has proved lucrative for all parties, speaking directly to a largely untapped market that has grappled with this issue for a while.
We love creative industries and the people who are at their heart – the artists. With current trends suggesting more creatives are heading towards a freelance-based business model, we figured it was time to find a solution for those struggling with payment terms. (We’re also champions of ‘the upstart’.) So, armed with a combined twenty years of experience, we created Hoverboard Finance. One of the first of its kind, Hoverboard is a debt-factoring service that caters directly to freelance creatives and the smaller denominations they invoice for.
In a nutshell, Hoverboard ‘buys’ the invoice from the creative at a discounted rate (calculated by invoice amount minus our service fee of 10%). Once the client approves the invoice, creatives are paid within 24 hours. Invoicing, debt collecting and waiting are all taken care of as part of the service fee. There’s no extra costs involved for the client and, where possible, automation is included to make everyone’s lives easier, there is just one online form to fill out with an online ID verification and then you are on your way. Automated emails will keep you up to date on the progress of the application, and once accepted its over to us to get client approval and wait for the money. We take care of the tricky parts.
Hoverboard aims to deal with the standard excuse we’ve heard time and again from clients: ‘we’re still waiting for our client to pay’. This might be fine for a larger company, who may have some sort of runway or small pool of cash to draw on when things get hairy. But it’s not so great for an emerging freelance designer, who needs to pay rent on Friday for example. It’s a ripple effect that we’re hoping to provide a short-term solution to. We’ve designed it for especially for creatives who are at the stage of their career where projects and cashflow aren’t entirely consistent. Hoverboard acts as a temporary runway for those that need it—a boost for those who are wanting to find their feet.