The short answer is, YES. At the very least you need these permissisons in order for theatrical distribution, local or otherswise. The reasons for these, may not always be about the amount of money you are making but about who owns the right to use the music and when distributing the film, the distributors want to know.

Even if they are the local band you heard and want to use, get them to sign a piece of paper at the least, stating that they have given you the rights.

Also it isn't about the size of your movie, but more about the size of the artist you are planning on using. Huge artists, will want money. You might be able to wrangle something talking to them, but often you are talking with them. The lower on the tree you go, the easier it might be to wrangle a good deal. But if you hear them on the radio, the licencing fees are fairly high, best finding another route for the music.

Michael Rogers
McRogson

Whoever is telling you you don't need permission to
use copyrighted material is a fool. A flat out fool.

Mike is right The owner of the right to copy (copyright)
owns the right to copy their material completely.
Copyright has nothing to do with making money, it's
the right of the owner to control what they own.

You are someone who is creating something. It is
essential that you respect the rights of other people
who create.

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The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)