Making a movie is an expensive endeavor, even for low-budget films. Between cast, crew, locations, and equipment, the bill to produce a feature film often lands in the range of millions to tens of millions of dollars. For independent filmmakers already struggling to make ends meet, financing a film on their own is highly unlikely.
Luckily, filmmakers have many options to find the cash to finance their films if they know what they're looking for, including:
Development investors
Equity financing
Tax incentive investors
Debt financing
Gap financing
Tiffany Boyle, President of Packaging and Sales at Ramo Law, is an expert at pairing filmmakers and financiers. She's seen many financing scenarios and told us that the best financing option is the one that makes the most sense for your project.
SoCreate Subscriptions Coming Soon!
Beta trials are full, but you can sign up to be notified once our subscription service begins.
Below, learn more about each type of film financing in Tiffany's own words so you can decide which financing route works for your film project and appear knowledgeable before approaching investors.
How To Get Get Financing for a Film
Before you look for film financing, you should find a lead producer and a director. Investors are much more likely to finance a project with these two key players attached at a minimum. A director and a film producer give your project a backbone and show that plans are already underway to make this movie.
How Does Film Financing Work?
Screenwriters don't typically participate in film financing unless – as Tiffany mentioned above – they are writer/producers or writer/directors. However, whether you fall into the former category or the latter, it is always good to understand the entertainment business, especially how films get made.
Film financing typically falls on the producer's task list for independent films. This is why it's so important to bring a producer onto your project early on.
Types of Film Financing
Based on the film's budget, shooting location, and distribution plans, the producer will pull together one or more of the financing options below.
Development Investors
Development funding is risky for investors and expensive for producers. Development financiers usually demand to recoup their costs and earn a percentage of the film's profits.
Development financing can cover the producer's pay until the film starts earning money, hire screenwriters for writing and rewriting a screenplay, assemble professional pitch decks and marketing materials, and cover costs associated with traveling to markets and festivals to seek additional funding.
Equity Financing
Investors will provide partial funding for a movie in exchange for partial ownership, then earn a percentage of profits when the movie hits the box office. If the movie doesn't earn any money, the investor loses out on their investment.
Tax Incentive Investors
Some states offer significant tax incentives for shooting in their location, using local resources, and hiring local crew and talent. Usually, states award these tax incentives after production is finished, so you won't be able to use this cash to cover production-related expenses right away. However, some financiers will offer a cash loan against that tax incentive amount, freeing the capital to use sooner.
Debt Financing
Consider debt financing to be a loan borrowed against a pre-sale amount promised to you by a distributor for a completed movie. This loan must be repaid, and usually with interest.
Gap Financing
Gap financing allows producers to close the gap in their fundraising efforts by taking an investment in the amount they think they will be able to bring in before production begins. This financing must be paid back before any equity investors receive a financial return on investment.
Summary
And this is by no means an exhaustive list of investment types when it comes to financing a film project. Filmmakers get creative with their independent film financing, incorporating film grants where applicable, crowdfunding, private investors, and more.
It becomes a little less intimidating to determine how you'll finance your film project when you know where to look. From equity to gap financing, there's no one-size-fits-all approach because financing is as unique as your movie. So, the more you know, the better off you'll be!
Stack your odds so you can stack those checks,