Finance Independent Films
As in many businesses, there is always a few different ways of financing film production.
I have already written about funds, grants and fiscal sponsorship and posted a pretty long list of funding organisations from around the world.
In this article, I would like to present to you a few more ways to finance your film.
1. A lot of documentaries are funded with grants and donations.
2. Feature films (since the features are much more expensive) need more money and more investments so you can try: territory pre-sales, investors, studio funds or/and the combination of two or more.
3. Tax breaks/production incentives across many states in USA and countries around the world help finance filmmaking.
4. Gifts from family and friends or charitable contributions can be tax deductible. (Check in your own country what kind of acts form the non-profit/charitable organisation. In the USA it is under 501(c) organisation/non-profit enteritis. You don’t have to have your charitable organisation; you can find many charities to act as an umbrella for your project, of course for a fee).
5. Gap financing is based on financing your film through the pre-sale to one or more countries/territories. It may sound unclear so I’ll explain it to you. Once you have the pre-sale contract/s, you go to the bank and show them your contract/s. The bank should and hopefully will lend you the money which you are still short of after signing the pre-sale contract/s. The bank is covering the gap between your contracts and your budget. Of course, banks will charge you an additional interest on that.
6. Loans work like any other loan needing/taking projects. You can either have a secure loan (more likely to receive repayments and if you don’t pay whatever secured, your loan will be taken away form you) and unsecured loan (no backing, money on your credit card or cash from family and friends). Loans can be obtained from banks or private investors, (very likely these loans will have to be secured).
7. Distributors finance the film/project. The Distributor obtains the rights to distribute the film, and in exchange, he provides the money for the project to be completed.
8. Borrowing money against the pre-sale contracts. It’s a similar way to the gap financing but this time you make a deal with one or more distributors in various countries and holding the contracts you go to the bank and ask them to lend you the money against the contracts.
9. Investor financing. Finding private investors or corporations to invest money in your project. Often you will have to form a new production company that would include your investors who would want to become shareholders in your future revenue.
10. Equity Investments. A joint venture by individuals, corporations, limited companies. (Contact your lawyer if you decide to finance your film by using equity investments).
In many countries, you will be able to find offers, exemptions for investors, tax returns, write-offs, gift tax etc. that are successfully used for financing films.
While you are here, you might also be interested in Creative Distribution.