During the day Che’s Lounge is a quiet coffee shop with second-hand sofas and deep, sometimes springless armchairs situated at the back of an alley off Main street Vineyard Haven. In the summer months some of this furniture is dragged out under a canopy where a few regulars nurse lattes.

But by night it is one of the Island’s principle music venues.

“Che’s is the place right now,” said Chris Liberato, manager of Aboveground Records and a booking agent responsible for bringing avant garde music to the Vineyard for the past five years.

Mr. Liberato now regularly sends artists to Che’s Lounge which has in a few short months become a magnet for any musical talent settling on the Island long enough to open their instrument cases — from the UK’s Mara Carlyle to Brooklyn’s Bradford Reed.

Death Vessel, recently artist of the week on My Space, will play mid-September with support from Sub Pop label mate Micah Blue Smaldone. Brilliant, off-kilter storyteller guitarist Milo Jones will play tonight on a bill arranged by Mr. Liberato.

They join a raft of Vineyard talent such as Willy Mason, Nina Violet and Kate Taylor, who regularly pick guitars at the back of the cafe in a stage framed by enough candles to stock a Catholic liturgy.

“Che’s Lounge so open to new things,” said Mr. Liberato, “and the simple fact is there aren’t any other venues making bookings that are out of the ordinary.”

The driving force behind the transformation is Colin Ruel, 24, a musician and, recently, promoter who regularly performs at the cafe himself.

P.J. Woodford owns the cafe, which opened in March last year, with Danielle Dominick. He was running a semi-regular Saturday music night at the cafe when Mr. Ruel began asking to book his friends to play.

“I was accepting all-comers and it was a crapshoot,” he said, “then Colin asked if he could put on a show. I gave him the last Saturday of every month and the caliber [of musicians] shot up exponentially.”

The cafe now holds up to four multiple-act gigs per week

“He was in a position to fill up the roster — he took my calendar so I didn’t even have an idea who was playing anymore. Colin’s got credibility and I’m willing to reap the profits of that,” said Mr. Woodford.

Though the cafe began charging for shows back in May the cover remains low (from $5 to $10) and the question of how to sustain the coffee house’s fledgling music scene was on Mr. Ruel’s mind when he thought up the musicians’ fund.

Brushing back a head of blond hair which looked like someone mopped the floor with a Yorkshire terrier, Mr. Ruel explained his saving a percentage of money from the door to finance production and printing of a record for a regular performer.

“You shouldn’t have to go broke to record,” he said, sitting in the cafe earlier this week“this is one way to begin giving back to the music community here.”

Enlisting the help of Mathew Cullen, an acclaimed music engineer who recently moved to the Vineyard full-time, he worked out costs on recording an album of material and printing 300 discs with sleeves, keeping costs low by going to different people for each stage.

The cafe will keep 100 copies, leaving the musician 200 CDs to sell at gigs or use as promotional copies to radio stations. The musician will also own the master copies.

The upshot: “It’s $2,000 of merchandise for the musician,” said Mr. Ruel. Proceeds from the copies sold at Che’s Lounge will go back in to the musicians’ fund, he added.

“In theory that allows us to put out another record quicker,” he said, “so if we sell fifty CDs at a record release party we can get started straight away on the next musician.”

Island folk musician Adam Howell is the first to get the musicians’ fund treatment. Mr. Howell, 20, plans to record the album before taking a job in something called sailboat delivery — “sailing boats to very, very wealthy people” — in the fall.

His tentative plan is to sail to Florida and then begin traveling and playing gigs.

“I never made a serious record,” he said, “I made stuff when I was a lot younger. Just like there was nothing better to do, we’d make four tracks play them back through the speaker to the computer microphone.”

Mr. Liberato helped distribute those first four-track recordings.

“Sometimes he sounds like someone like Bert Jansch then others he’s doing something completely different. He’s the real deal,” said Mr. Liberato.

Mr. Ruel chose Mr. Howell because he’s good and he has an album ready to go.

“We given Adam this place to play whenever he wants and now this gift of a record,” he said.

Mr. Ruel hopes ultimately to launch a not-for-profit record label around the fund. Mr. Woodford likes the idea.

“The cream rises to the top and if they’re good enough we want to facilitate making that record. It fits into what Che’s has become,” he said, “I love the musicians that play here. They give freely of their time and talent. This gives back to musicians, at least individually.”