A Completion Bond is an Important Element for Indie Film Finance
In the realm of independent filmmaking, securing a completion bond is a pivotal step toward ensuring your project’s success. As a producer with over 25 years in the industry, I’ve witnessed firsthand how a completion guarantee can make or break a production.
Understanding Completion Bonds
A completion bond, or completion guarantee, is essentially an insurance policy for your film. It assures financiers that the project will be completed on schedule and within the agreed budget. This guarantee is crucial for independent films, where budgets are often tight, and financial backers need confidence in the project’s viability.
The Necessity of Completion Bonds
Investor Confidence
Investors are more likely to fund a project if they know there’s a safety net ensuring its completion. A completion bond provides this assurance, making your film a more attractive investment.
Risk Mitigation
Unforeseen challenges—such as weather disruptions, equipment failures, or cast injuries—can derail a production. A completion bond ensures that these obstacles don’t prevent the film from reaching completion.
Access to Financing
Many banks and financial institutions require a completion bond before approving loans for film projects. It’s a standard part of the due diligence process, especially for independent films seeking substantial funding.
Essentially, a completion bond provides assurance to the film finance that the film production will be completed and delivered to a distributor satisfying the contract to do so. This ensures the movie or tv production will be finished and turned over to distribution for payment to financiers.
Real-World Applications of the Completion Bond
Consider the film First Reformed, which I had the privilege of producing. Despite its modest budget, securing a completion bond was instrumental in obtaining the necessary financing and ensuring a smooth production process. This guarantee provided our investors with the confidence that the film would be completed and delivered as promised.
Completion Bond Companies
Film Finances is the entertainment industry leader in Completion Bonds for film and television production. There are several companies which also provide completion guarantees including Media Guarantors. Here is a list of current completion bond providers.
The Completion Bond Process
Securing a completion bond involves several key steps:
Comprehensive Planning
A detailed film budget and shooting schedule are essential. These documents demonstrate to the bond company that the production is well-organized and feasible.
Due Diligence
The bond company will assess the project’s key personnel, script, and financial plan to evaluate risk. Your team’s experience and the project’s scope play significant roles in this evaluation.
Ongoing Monitoring
Once the bond is in place, the guarantor will monitor the production to ensure it stays on track, intervening if necessary to address any issues that arise.
One thing to keep in mind is that the bond company is on your side. They want you very much to succeed and to deliver. Many inexperienced producers might have a false perception that there exists an antagonistic relationship with the bonder. This is far from true, and quite the opposite, they can be very much the filmmaker’s friend in guiding and advising production with their extensive experience.
Cost Considerations
The fee for a bond typically ranges from 3% to 5% of the total film budget. While this is an additional expense, it’s a worthwhile investment that can open doors to financing and distribution opportunities that might otherwise be inaccessible.
The Importance of Completion Guarantees For Film
Here is a link to a Forbes article by one of the preeminent entertainment attorneys in the film business, Schuyler Moore, aptly titled The Important of Completion Guarantees For Film
In Conclusion
In indie film finance, a completion bond is more than just a formality—it’s a critical component that can determine your project’s success. By providing a safety net for investors and ensuring that unforeseen challenges don’t derail the production, completion bonds enable filmmakers to bring their creative visions to life with greater security and peace of mind.
For more insights on film budgeting and production, visit FilmBudget.com. For a complimentary consultation on your film or television production contact Producer Jack Binder at https://filmbudget.com/contact
