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Debt | Late Money

If you had the choice between putting your money in an almost completed project or a vague idea with a couple of inexperienced producers attached, which would you choose? Okay, now if you also had the option of getting your money back before all those other suckers who anted up early in the game, would you also go for that option? Of course, you’re incredibly biased, but a lot of financiers like to enter later on with a loan offer. Basically, debt financiers will offer less than the minimum purchase price they believe a project will get in the marketplace. However, equity investors who don’t like to be muscled out will sometimes forbid senior debt agreements. And of course, being the smartest investors on the block, debt financiers will sometime sneak gigantic fees into these agreements, because, you know, Wall Street. No matter how desperate you are to finish your project, be very careful with debt financing.


Gap (Super Gap)

A gap loan usually offers to bridge the remaining gap in the production budget, which means lending enough to cover about 10-15%. So if you have 85-90% of your funds raised, you would qualify for this. If you need more than that, say up to 30%, you can try to find a Super Gap loan. Because they’re supplying the last piece of the puzzle, financiers are sometimes more willing to invest at this stage. Gap loans also involve less paperwork than a Bridge Loan, but again, there are definitely sharks in the water here.


If you’re already in the final stages and you find yourself a little short of funds, you could opt for completion financing too. It’s more of a gamble for the filmmakers, and the financiers usually know this too. Again, be wary of anyone you’re doing business with at this stage, and also of your own desperate mentality. But in terms of financial chicanery, it can actually be safer than a gap loan.

Further Reading:

Mezzanine Debt

The line between Mezzanine and Super Gap can be a little blurry, and some argue about whether it actually exists. But basically, if you have equity already in place and want to get to the level where debt financing kicks in, you can try to secure a mezzanine deal. These can run up to 50% of a project’s budget. However, these are becoming less common, especially for mid-level independent films.


This is where the true media financiers like to pounce. With high fees and a quick return on investment, you can think of a bridge loan like gap on steroids. These deals don’t often happen for smaller budget projects. Unless you have faith in your business and legal team, you probably want to stay away from this type of debt financing.

Negative Pick Up

If a studio or distributor agrees in advance to buy your project if it’s finished and deemed acceptable, that’s a negative pick up deal. If “acceptable” seems like a vague description that sets off a silent alarm, then you want to be careful that there are no loopholes or hidden out clauses in the terms of this deal.

P&A Funding

Prints & Advertising basically means an agreement to pay for your project’s prints and advertising. It’s as simple as that, except that it’s not. Basically, the distributor agrees to advertise your project, since prints cost much less in the digital age. Not only is advertising an act of self-interest, these deals often include fees that would make Tony Soprano squirm.

Credit Cards

Don’t do it. More than twenty years ago, Kevin Smith financed “Clerks” this way. There’s a reason you haven’t heard another success story besides this one.

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