A Process For Getting Your Film Financed
Hi there everyone,
After my email last week on My Process For Getting Distribution, someone asked if that was for completed films only and if so, what’s a process to follow for films in the development and financing stages?
I’ll preface this by saying that with all the changes happening around streaming services right now and their retraction in financing and even acquiring independent films, the good ol’ structured finance aka indie finance model is coming back into sharp focus.
You know the one - private equity paired with tax credits, soft money, debt, and pre-sales.
I’ll qualify this by saying that I’m currently in the throes of putting a few feature film projects together using the independent financing model as we speak, so this information is pressing in my world and absolutely fresh from the trenches!
Step One - In-House Development and Packaging
Probably my biggest takeaway is that there is no independent financing without lots and lots of hands-on, in-house development and packaging of a project. No shortcuts here - you gotta roll up your sleeves and do the work yourself or hire someone to be a part of your team who has the knowledge and contacts to do it for you. Development and packaging is where the rubber meets the road and if you stall or fail in this step, there is no proceeding to the next step (or at least not that is productive).
Step Two - Outreach To Sales Partners
Getting a good Sales Agent partner on board early on in the process is a key building block of your finance plan. Just having them attached to your project establishes credibility in the eyes of equity financiers (assuming they are a trusted company!) Furthermore, their ability to secure at least one pre-sale early on will create momentum and give confidence to other financiers (gap, equity) to come on board. It’s like building blocks and the sales agency partner is your foundation
Step Three - Approach Debt Financiers
Who is going to cash flow your pre-sales, tax credits, and provide any gap to your finance plan? Your sales agent or experienced producer/EP should be able to advise on which companies they’ve worked with before and the pro’s and con’s of each, so tap into their network for best results (oh the shark infested waters of debt financiers! lol) Be prepared with an actual finance plan that you’ll need to submit to them as part of their review process before they can give you a quote. Don’t know how to put that together? Hire a team member who does!
Step Four - Equity investors
If you don’t have equity investors by this point in the process, and you’re left with a 30%-50% hole in your finance plan that pre-sales and debt isn’t going to cover, now’s a great time to go find those people who will put in actual cash/equity to your project once you have all these other credible partners on board. Of course this part is never easy but by approaching equity with all these other pieces already in place, you have a much better chance than trying to close someone on just a ‘naked’ script.
Step Five - Close
And now, you put all these complex pieces together and close your financing at least 30 days out from shooting, or at the start of prep when you’re going to need to start paying people. This is where it becomes critical to have a member of your Producing team who has experience closing multi-party financing plans like this one. It can be a bear!
Speaking of easy, I’d be lying if I said ANY of this is easy. But at least there’s a formula/process that you can follow each and every time.
Every project is indeed different and will require variations to this model here and there, but I think it’s a good framework for you to take in and start from.
What are your questions on this five step process for financing your film? Leave me a comment or question here…
AFM - Development Consulting & Advisory
While my hands-on ‘done for you’ service of this process EP Services is out of reach for most, I wanted to bring back a paired down version I’ve done in the past to help kick start your development and financing efforts, especially in the lead-up to AFM.
It’s completely bespoke and tailored to your specific production (hence I don’t even have a page up on the site yet for it) - so if it’s something you’re interested in, please email me at email@example.com and answer these questions:
Project name, log line, and proposed budget
Producers, director, and any actors currently attached
Production plan and any financing already attached
With that info, we can start a productive conversation on if and how I can help drive your efforts towards financing, and what a consulting fee would look like depending on your specific needs for the project.
Look forward to hearing from you!
On that note, I’ll wrap things up for today…. I’ll see you in the comments with any questions and I’ll be back with another installment soon.
To your success,