In some instances, a modeling agency will take on a new model and pay for the expenses related to his/her first test shoot to create a portfolio, headshot and comp cards. Obviously, this is great because it means the model doesn't have to come out of pocket for it. But that doesn't technically mean it's a free ride the whole way.
Whenever an agency foots the bill for things like setting up a newly signed model's career, they're not doing it because they enjoy it--it's because they feel confident that the model will book work. That means they'll get paid and receive a good return on their "investment." Remember: modeling is a business. Period.
So what does that mean for the model? The act of an agency paying for such costs can be viewed as a short term loan of sorts. Younger aspiring models that aren't familiar with this concept should know that loans in general means borrowing money from someone but having to pay it back at a later date and time. This can also be applied to agencies representing new models.
When an agency tells a model they will pay for the costs of their test shoot, portfolio creation and printing expenses, it doesn't mean they give the model the money to take care of everything. In most cases, the agency takes care of things on that end. But it still qualifies as a loan because it's an amount the agency will require the model to repay over a period of time.
How does that work? By getting hired for modeling jobs. Let's say Model A has her start-up costs paid for by the agency, which totals an amount of $750.00 (this is just a hypothetical amount). That means Model A technically owes the agency $750.00. Now let's say Model A starts getting hired for all kinds of stuff: runway shows, catalog shoots, etc. As you know, agencies make their profit from "commissions," which is a percentage that the agencies take out of a model's earnings for each assignment they get. With each new modeling job Model A books, the agency takes out their commission, which includes the amount of money owed from covering the costs of the test shoot, headshots and printing costs from before.
The result: the $750.00 originally covered by the agency gets paid back with each commission taken out from the jobs Model A works. Within a few months (or however long it takes), the loan balance is paid off and Model A no longer technically owes the agency any money.
This is the ideal situation, however. Not all female and male models that get signed to agencies book work--at least not consistently enough to continue having a contract. Should an agency invest in starting a new model's career and it turns out he/she doesn't get hired for anything or only a few gigs, that means there's still a loan balance left to pay back. What does that mean for the model? It means if they don't get enough work to pay off the loan via the agency's commission, they'll have to pay the remaining balance out of their own pocket.
This is completely legal and part of the agency/model business relationship process. Most agency contracts have a clause somewhere that states the model agrees to pay back any expenses owed to them in the event that the model isn't able to earn profits for the agency. Failing to follow this--if it applies to a model--could lead to the agency filing a lawsuit or taking other legal action to make sure they get their money back.
As scary as that may sound, it doesn't happen all the time--at least not consistently enough that aspiring models should lose sleep over it. I'm sure there are instances where an agency won't force a model to pay back what they're owned in the event of not being able to book work, but it's better to know both the good and the bad about this subject.
This is why there are several options to paying for the costs of things like the first test shoot and printing the materials needed to market a model. For more info on that, please read this blog post: The Deal With Agencies & Test Shoots for Portfolio Building.
Should you happen to be an aspiring female or male model that gets their costs covered by the agency, I don't want you to start panicking about how much you'll end up owing if you don't book work. I don't mean for this post to be a scare tactic (although I'm sure I'll receive blog comments or emails saying as much, lol)...the purpose of this post is to inform you of one of the many realities that happens in the modeling industry.
It's important to keep in mind that the word "free" may not necessarily have the same definition within the modeling world as we tend to think of it. Models who get their costs covered should put all their energy and focus into being the best model they can be so they'll book work, make money and--in turn--make the agency money.