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Film Financing Strategy





In the world of independent film financing everyone seems to be talking about "soft money". What does this term mean and why is it such a popular strategy for indie film funding?

As numerous veteran producers will tell you, cash has become scarce and over the last 3-4 years raising financing for films has become even more difficult. In the past, a variety of different types of investors helped to contribute coin toward a film's negative cost (production budget). Some of the investors in film projects and independent movie studios included insurance companies with excess cash to invest, owners of television stations on a global basis willing to make advances for TV distribution rights, and film funds that sprung up to take advantage of tax advantages in several countries, just to name a few of the previously popular film funding sources.

The volatile global economy helped to create a risk-averse mood, impacting both large corporate motion picture investors as well as private investors who supported independent film projects. Film financing has changed and many of the previously established strategies for generating film investment dollars are simply no longer available. Other sources of film funding invest at much lower levels. In the case of some film investors, such as banks, have tightened their lending criteria so that only the largest, most-established, filmmaking teams have any hope of seeing film financing from that source.

Soft money film financing takes on a variety of different forms:

* Tax Credits & Tax Allowances

* Co-productions

* Government-backed Loan Support

* Subsidies

* Negotiated Service Discounts & Barter

* Box-office Rebates/Tax Support

These motion picture financing sources contribute to a film's production budget, reducing the total funds that need to be raised. While various film incentive programs often do not involve cash changing hands, they can help a film get the green light to move into production. Several states in the U.S. now offer motion picture production and/or investment incentives as do a variety of different countries and regions.

There are frequently very specific requirements for accessing film production funds from these sources. Not all sources of financing will be appropriate for all film projects. Some may require cooperation with production companies in other locales to fully access the incentives available.

Sharp Angle offers consulting services that help you determine if soft money can be raised for your film. When applicable, we also include these strategies in the film business plans we create for our clients. E-mail us for more information.

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