There are numerous types of film finance providers for film and television production finance. Each of these types have different business models.
What are Film Financing Requirements?
Each film financing entity has separate requirements which they look for in a project in deciding to provide funding. The most common element required is the film budget for the project, but equally or more important may be the screenplay, international sales contracts, or film tax credits availability.
How Important is the Team Behind a Project?
Likewise entertainment funding companies will look at your team – who is behind the project and what value do they bring to the production. This provides them with a sense of security, if they determine the filmmakers and stakeholders involved are experienced, have a track record, or have engaged with those whom do.
What are the Different Types of Film Finance Providers?
Among the various types of film financiers which provide capital for the film business, the general categories in the sector are:
- Debt, Gap, and Film Tax Credit Financing
- Entertainment Companies (providing equity investment)
- Film & Television Production Companies (acquire intellectual property to produce and/or distribute)
- Individual Equity Investors
Some companies provide a combination of the above forms of film and/or television production funding.
All except perhaps the third category on the list, acquisition of IP to exploit have as a fundamental item required to consider a project a professional film budget as well as a well developed film finance plan.
For all except perhaps the first category on the list (Lenders, and increasingly even those) an outstanding screenplay or teleplay is a critical factor in determination if the project will be considered, and approved, for production financing.
Debt, Gap, and Film Tax Credit Financing
This form of funding is primarily a lending vehicle. This might be a bank or finance company engaged in providing loans against collateral. The collateral can take the form of international film sales contracts, distribution deals, or film tax credit contracts from a local US State or foreign country.
In addition to these forms of collateral, these lenders will review the film budget which is the basis for the production’s film finance plan. The film budget is likewise a requirement for determining the film tax credit net benefit (payout.)
Here is a link to an informative panel conference webinar How to Utilize and Secure Debt and Gap Financing
Film Equity Investment Companies
These types of companies are engaged in the production and/or distribution of film and television content. Providing equity investments in productions is the core of their business. These are the true film financiers and bring different sources of funding together.
These can include production companies, mini-studios, lenders with an equity contingent arm. Investment in film and tv may be driven by commercial goals; profit driven.
Alternatively they might be an artistic or social themes driven entity, engaged in high end television or independent film investing, production, and releasing.
These firms prioritize the script, the film budget, and the film finance plan to determine viability. The creative and production team, along with strong name talent attachments, are key considered elements.
Film and Television Producers and Production Companies
Even more numerous than the above, a large amount of film and television producers and companies are in the business of acquiring intellectual property. These companies will option the IP and develop the properties through packaging and arranging financing through their known funding sources.
Many of these types of firms will have output deals with distributors, studios, streamers, etc. They know what their buyers are looking for and what their requirements are to provide financing and/or distribution.
The screenplay, film budget, and film finance plan are the basis for consideration. Additionally the team behind the project and any cast attachments are crucial however they are unique in their development of the package as a business model.
Individual Equity Investors
Individual equity investors are high wealth persons engaged, or seeking to be engaged in the financing of indie films and tv series. Their aims might be their passion for cinema, specific topics, social causes, celebrity and the lure of showbusiness.
As with all investors they intend to make a return on the capital, while some might wish for a more active role in the creative and production process.
For these types of investors the screenplay, film budget, and film finance plan are basic requirements in addition to cast being a substantial bonus factor.
