FILM & TV
While Motion Picture production is thought of as being especially risky, there are ways of hedging this risk. The Arranging Source that offers this financing program arranges a successfully-hedged investment that presents the possibility of high-level returns, while at the same time minimizing down-side risk.
Locations Available :
Funding Amount :
Eligible Projects :
Interest Rate :
Pre-Financing Costs :
$1 Million USD to $36 Million USD
Motion Picture Productions
Prime + no more than 4%
Film cannot contain excessive sex or violence.
Approximately 3% in underwritting
Typically 2% is out-of-pocket for the borrower
Producer Equity Commitment: 20% against total project costs
100% of the Principal Amount must be backed by bankable pre-sales, cash, Letters of Credit, and government incentives and rebates
60% - Producer or nominee
40% - Arranger
Borrower maintains 60% of the project
Production Loan will be made available for a period of up to 24 months from date of first drawdown
Principal Loan amount will mature and become due in its entirety within 36-60 months from date of first advance of funds
FREQUENTLY ASKED QUESTIONS
What is the expected role of all parties involved?
Producer : Shall be solely responsible for all production services traditionally associated with the development, pre-production, etc.
Arranger : Shall arrange and facilitate the full financing of the project.
Lender : A bank to be determined by the Arranger.
Borrower : Arranger shall create a new single purpose vehicle (i.e., an LLC, LPC, etc.) designed exclusively for the purpose of borrowing funds from the Lender to fund the project.
How does the Collateral work?
A Single Purpose Vehicle is created and shall be secured and backed approximately as follows:
Bankable Presale: 15%: Producer shall secure a bankable presale agreement with a sales agent or distributor.
Bridge Presale Commitment: 15%: Pending income to be generated from product placement/other, the Producer shall collaterize 15% which shall comprise a holdback of partial fees payable to Producer, Writer, Director, Service Providers and/or other budgeted items back by two major territories or a combination of smaller territories.
Arranger Gap: 15%: Arranger shall provide collateral in the form of cash, a line of credit or other form of bankable guarantee.
Tax Incentives: 25%: Producer shall provide a commitment of 25% representing the discounted value of Tax credits, Rebates and Grants.
Arranger Commitment: 10%: Arranger shall provide collateral in the form of cash, a line of credit or other bankable guarantee.
Producer Equity Commitment: 20% Producer shall provide cash or cash equivalent guaranteeing the Borrower's payment of its obligation to the Lender.