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10 Types of Film Finance

Whether you working on a small indie film or a big production, getting the right funds together can be a big task. Each way of funding has its own upsides and downsides, so it’s key for you to carefully choose a mix of funding sources that best matches your project.

10 Ways to Fund your Film

Identify the Best Film Funding Type for Your Project


1. Government Funding

Many governments allocate funds for arts and cultural initiatives to encourage creative industries, including film production.

Benefits:

  • Supports filmmakers in bringing their creative visions to life.
  • Contributes to the growth and development of the local film industry and cultural landscape.

Requirements:

  1. A well-defined and innovative film project.
  2. Demonstrated experience and track record of the filmmakers.
  3. A detailed budget and finance plan.
  4. The film’s potential to contribute to the cultural, social, or historical identity of the region or nation.
  5. In some cases, the film may need to be shot in specific regions or countries.
  6. A commitment to diversity and inclusion.
  7. A strategic plan for the film’s distribution and marketing.
  8. A realistic production timeline and evidence of the project’s feasibility.
  9. Fulfilling all legal and regulatory requirements.
  10. The film should provide a benefit to the public.

How to get Government Funding


2. Film Grants

Film grants are a valuable funding option that can provide filmmakers with the resources they need to bring their creative visions to life.

Benefits:

  •  Non-repayable: Unlike loans, grants do not need to be repaid, making them a risk-free source of funding.
  • Supports Creative Freedom: Many film grants support the artistic vision of filmmakers, offering more creative freedom than other funding sources might.
  • Promotes Diversity: Many grants aim to support underrepresented filmmakers or unique perspectives, encouraging diversity in the industry.

Requirements:

  1. Eligibility Criteria: Each grant has its own specific eligibility criteria, which can be based on things like the filmmaker’s background, the nature of the project, or the production’s location.
  2. Project Proposal: Applicants typically need to submit a project proposal detailing their concept, budget, timeline, and more.
  3. Completion: Often, grant recipients are required to complete the project within a certain timeframe and may need to report on their progress.

Where to find Film Grants


3. Tax Incentives

Tax incentives constitute financial benefits or credits that governments or regional film commissions offer to encourage film productions in specific locations, stimulating local economic growth and promoting culture and tourism.

Benefits:

  • Reduction of overall production costs for filmmakers.
  • Stimulates local economic growth and creates job opportunities.
  • Promotes local culture and tourist attractions.

Requirements:

  1. A detailed business plan outlining the objectives, budget, and timeline of the film project.
  2. A commitment to spending a certain percentage of the film’s budget within the designated region or country.
  3. A plan to hire local crew members, cast, and other talent from the region.
  4. An outline of how the film will promote the region as a filming destination.
  5. Various legal and financial documents.
  6. A commitment to comply with any monitoring and reporting requirements.
  7. Proof of insurance coverage for the film production.

How to Access Tax Incentives


4. Pre Sales

Pre-sales involve selling parts of the film’s distribution rights to distributors before the film is completed, providing a source of revenue for production while reducing financial risk and securing distribution avenues for the finished product..

Benefits:

  • Provides a crucial revenue stream before the film is even made, reducing financial risk.
  • Offers distributors the advantage of securing rights to potentially promising films early.

Requirements:

  1. The film must have commercial potential and appeal to distributors in the target territories.
  2. A strong cast and crew can enhance the film’s marketability.
  3. A compelling and unique story concept.
  4. A detailed and feasible production plan.
  5. Working with an experienced sales agent.
  6. Filmmakers with a successful track record or industry recognition.

How to Pre Sell your Film


5. Negative Pickup Deal

A negative pickup deal is a contractual agreement where a production company sells its completed film project to a studio or distributor for a fixed price before the film is made, ensuring a guaranteed distribution deal and financial security during production.

Benefits:

  • Pre-selling the completed film provides financial certainty.
  • Provides financial security during the filmmaking process.
  • Transfers distribution responsibilities to the studio or distributor.

Requirements:

  1. Budget management to ensure costs do not exceed the agreed-upon fixed price.
  2. Completion guarantees may be required.
  3. Successful negotiation of the deal terms such as fixed price, delivery schedule, distribution rights, etc.

How to structure a Negative Pickup Deal


6. Gap Financing

Gap financing bridges the financial gap between the total production budget and the funds already raised, providing a loan to filmmakers based on their project’s future revenue potential.

Benefits:

  • Available when other primary funding sources are already in place.
  • Provides loans against unsold rights and territories.

Requirements:

  1.  Other primary funding sources should already be committed to the film.
  2. The film’s potential is evaluated based on unsold distribution rights and territories.
  3. Risks associated with gap financing need to be carefully managed.
  4. A completion guarantee may be required.

How to get Gap Financing


7. Fiscal Sponsorship

Fiscal sponsorship is a partnership between a film project and a non-profit organization, enabling filmmakers to receive tax-exempt donations for their project and benefit from the administrative support of the non-profit organization.

Benefits:

  •  Enables filmmakers to seek tax-exempt donations and grants.
  • Non-profit organization manages the project’s funds.
  • Non-profit may offer fundraising support and financial oversight.

Requirements:

  1.  The project should align with the mission and goals of the fiscal sponsor.
  2. The project should serve a charitable or educational purpose.
  3. Once completed, the fiscal sponsor may assist with the film’s distribution.

Where to find Fiscal Sponsorship


8. Crowdfunding

Crowdfunding is a popular film funding method, allowing filmmakers to raise funds from a large number of individuals usually via online platforms.

Benefits:

  • Public Engagement: It’s a great way to engage with the public and potential audience, creating a sense of community around your project.
  • No Repayment Necessary: Unlike traditional loans, money raised through crowdfunding doesn’t need to be paid back.
  • Creative Control: Filmmakers retain complete creative control over their project, unlike with some other funding sources.

Requirements:

  1. Strong Pitch: You need a compelling pitch that clearly communicates the concept, benefits, and potential of your film.
  2. Rewards for Backers: Typically, filmmakers provide rewards to backers, which could range from a simple thank you note to an executive producer credit.
  3. Fulfillment & Transparency: If your crowdfunding campaign is successful, you are obliged to deliver on any promises made and to keep your backers updated on the project’s progress.

9. Private Investment

Private equity is a significant source of film financing, where private individuals or firms invest in a film project expecting a return on their investment.

Benefits:

  • Large Capital: Private equity can often provide substantial capital, possibly enough to cover the full production costs.
  • Flexibility: Investors may offer more flexible terms than traditional financial institutions.
  • Strategic Partnerships: Private investors often bring industry connections and strategic advice, not just money.

Requirements:

  1.  Solid Business Plan: Private equity investors need a comprehensive business plan showing potential return on investment.
  2. Proof of Concept: Demonstrating a film’s potential, ideally with a script, director, and key cast attached, is typically required.
  3. Exit Strategy: Investors will want a clear exit strategy outlined, showing how they will recoup their investment and make a profit.

How to Access Private Investment


10. Product Placement

Product placement in film is a promotional tactic where brands are integrated into a film’s plot, gaining exposure while also offering a source of funding for the film.

Benefits:

  •  Revenue Source: Product placement provides an additional revenue stream for filmmakers.
  • Reduced Production Costs: It can help offset production costs by supplying products for use in the film.
  • Authenticity: Properly executed, it can add a level of real-world authenticity to a film.

Requirements:

  1. Brand Alignment: The product must logically fit into the film’s plot and not disrupt the viewer’s experience.
  2. Legal Agreements: Detailed legal agreements outlining the extent and nature of the product’s placement are necessary.
  3. Creative Control: Filmmakers must balance creative control with the demands of the product placement.

Master Product Placement