| Producing a $1 Million to $3 Million Canadian Feature Film |
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Page 3 of 3 What is a completion bond and why is it important? Funders will usually require that you have a completion bond in place before they will fund your film. A completion bond guarantees that the movie will be made. It is issued by a guarantor who normally receives a percentage of the budget (2.5% to 4%). The bonder will have specialists who ensure that the picture’s budget is commensurate with the story, that it can be made for that budget, and that the people who are budgeting the film know what they are doing. If the bond company says it is impossible to make the movie within the budget, then the producer either has to change the script or change the budget. There is only one guarantor in Canada and two to three worldwide. When I ask what they look for in backing a movie they say they look at the track records of the people who are making it. Ensure that the Bond Companies have input in the choice of your Line Producers, Production Manager and Production Accountant. What budget detail is critical but sometimes missed? It is very important to budget for the audit that takes place at the finish of the film. Federal and provincial governments look to an auditor to confirm that you have made the expenditures you are claiming for tax credits. Remember, it can take up to five or six months to get your money back from tax credits and you may have to go to a bank for interim financing. Do you suggest a first- or second-time Canadian feature filmmaker try to obtain international co-financing? Once you enter the level of international co-production, the complexity of financing a film along with the accompanying legal issues and paperwork increases substantially. You’re dealing with international financiers, bankers, lawyers and gap financiers, all of which requires a sophisticated and experienced global understanding of the business. The hard truth is that international financiers likely won’t deal with a filmmaker who doesn’t have a substantial track record. If you are an intermediate filmmaker and you feel you have a really good script that would support co-production, you could try approaching a veteran producer who has international experience, and who might agree to act as executive – or co-producer on your project. What are some of the pitfalls with international co-financing? The global financial picture for co-productions is shifting all the time. One year Germany has money; the next year, the U.K. It is extremely difficult to stay up-to-date on current sources of international money. Legal Fees, Accounting Fees, Financing, Travel, Living and duplication of office costs significantly add the to production costs; it is important to consider if the gains of doing a Co-production will offset the cost and complications of having additional partners. What is your key piece of advice? All the financing has to be in place and committed before you think about actually starting production. You don’t want to begin and find you don’t have enough money because then the whole thing could fall apart.  |
