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Basic film and TV funding.
There are ways in funding your entertainment project, but these are a few basic means.

  Independent. This can range from a vast array of funders. From a single person,  a group of investors, insurance companies, investments companies, Venture Capital companies, etc. All  willing to invest in the entertainment business. Finding Independents.   Preparing the funding package, a copyrighted outline

 Negative pick up funding

Negative pick up financing is best accomplished from acquiring a letter of intent (LOI ) from distributor which need to be backed by a LOI from a film bonder/ film insurance company and in most cases the LOI becomes the collateral for a loan with the funder or lending institution. Most Negative funders are established film finance companies and are with you weekly to make sure all is according to plan and issue checks from the budget .. Neg's can be  hard to get, but can give producers much more ownership.

The basic requirements needed to close the Negative., deal are:
1. Form a corporation (see My Incorporate) for producing the property with the main players.
2. Obtain letters of confirmation from bona fide and top producer(s) and a director.
3. Obtain letters of confirmation from a bonding company.
4. Secure an agreement from a major motion picture distribution company, approved by the lender.

Film Production Financing Guidelines 
The guidelines for providing film financing vary depending on the project and whether third parties are cash flowing part of the strike price for the project. As a Bank is strictly a lender, it does not take any creative risk in connection with a project; thus, repayment of the Bank's loan cannot be tied or dependent on the project's commercial success. The sources of repayment of the loan must be identified and quantified before the loan is documented and production begins and must be sufficient to cover the strike price, all loan fees and documentation costs, estimated interest on the life of the loan, including a provision for events of force mature,  and the premium for a completion bond as well as any budget contingencies called for by the bonding company. If third parties such as equity investors are cash flowing a portion of the project budget, the amount of the loan is adjusted accordingly. In all cases, the full amount of the bank's loan must be adequately collateralized by firm payment obligations. Acceptable collateral can include escrowed cash, marketable collateral held by the bank in safekeeping, standby or commercial letters of credit from acceptable financial institutions, and distribution or licensing agreements with minimum guaranteed advances payable on or as a result of delivery by credit worthy domestic or foreign sub distributors. Output deals are not acceptable. The credit worthiness of some third party players may be enhanced by the use of standby or commercial letters of credit from acceptable financial institutions.

A loan application package should include the following materials, as applicable:

1. Resume of the producers and director.
2. Chain of title documentation showing ownership of the project script.
3. Breakdown of the project budget.
4. Weekly cash disbursement schedule to allow for calculation of expected interest.
5. Copies of signed distribution contracts or license agreements for minimum guaranteed advances, or a list of potential players interested in the project.
6. Copies of any contracts with equity investors.
7. Name and telephone number of a contact officer at any financial institution to be issuing standby or commercial letters of credit.
8. Description of marketable collateral, if any, to be pledged to secure the loan.
9. Letter of intent to issue bond from completion bond company.

More on What Funders Require

For more information on obtaining a Completion Guaranty/ Film Bonding or Event Insurance, E mail us at;

Completion Guaranty / Film Bonding
Agreement Example

 Private placements and stock offerings (IPO)

Other.  Self funding or acquiring funding groups. See Millionaires list


Film Funding: Gap and SuperGap

The terms Gap Financing and SuperGap financing have been getting a lot of play lately. As these concepts are sometimes hard to succinctly define, I was impressed by this pithy description from the Wikipedia:

Gap/SuperGap Financing


In motion pictures, Gap/Supergap financing is a form of mezzanine debt financing where the producer wishes to complete their film finance package by procuring a loan that is secured against the film’s unsold territories and rights. Most gap financiers will only lend against the value of unsold foreign (non North American) rights, as domestic (North American: USA & Canadian) rights are seen as a “performance” risk, as opposed to more quantifiable risk that is the foreign market. In short, this means that the foreign value of a film can be ascertained by a Foreign Sales Company/Agent by evaluating the blended value of the quality of the script, its genre, cast, director, producer, as well as whether it has theatrical distribution in the US from a major film studio; all of this is taken into consideration and applied against the historical and current market tastes, trends, and needs of each foreign territory of country. Surprisingly, this is fairly predictable to a certain degree of certainty. Domestic distribution, on the other hand, is very unpredictable and far from ever a sure thing (e.g. just because a film has a big budget and a commercial genre and cast, it could still be unwatchable and thus never receive a theatrical or television release in the US, thus being relegated to being a big budget, direct-to-video film.) So, in as much as there can ever be any certainty in the entertainment business, lending against foreign value estimates is almost always going to be a much better bet than banking on domestic success (comedies and urban films being two notable exceptions: they’re referred to a “domestic pieces” or “domestic plays”.) 

True to its mezzanine nature, in the pecking order of recoupment of investment, generally, gap (or supergap) loans are subordinate to (recoup after) the senior/bank production loan, but in turn, the gap/supergap loan will be senior to (recoup before) equity financiers.

A gap loan becomes a supergap loan when it extends beyond 10-15% of 100% of the production loan required to shoot the film (or in other words, when the percentage of the gap required to complete the film’s financing package becomes greater than a bank is willing to bear, which is traditionally 10-15%, but can sometime be a flat dollar threshold like USD$1,000,000.)

Gap/Supergap lending is a very risky form of capital investment and accordingly the fees and interest charged reflect that level of risk. But at the same time it’s not unlike buying a house: nobody pays 100% of the purchase price with cash; they pay about 20% in cash and borrow the rest. Supergap financing works by the same principal: put down 20-30% cash/equity and borrow the rest.

Over the years, because of the high risk nature, many supergap companies have come and gone, but a few established players have survived the ups and downs of the markets: Screen Capital International is arguably the gold standard in the industry, with Grosvenor Park, Blue Rider, Newmarket Capital, and 120db also being significant “players” in the debt financing space.

[All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) ]

You can also find some useful reference books at the Writer’s Store: film funding


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