CanadianFilmMaker - Interim Financing: What, Where and How

Interim Financing: What, Where and How

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Business terms
The business terms for the loan are negotiated on a case-by-case basis, and will include:

The requirements for setting up a loan and beginning to advance funds
The guarantees you must provide
The form of the loan
The terms of repayment
The interest rate
The legal expenses
The set-up fee

Interest rates
You will pay interest on the loan from the time you receive it, until it is repaid. Your production accountant can set up the cash flow, and calculate how much interest will be incurred during the life of the loan.

The interest rate is negotiable, though only to a degree. In setting the rate, the bank considers a number of factors, all of which reflect its focus on the security of the loan. The more certain it is that the film will be delivered and the loan repaid, the happier the bank will be with you – and the happier you might be with the interest rate.

In assessing loan security, the bank looks at such things as:

The experience of your producers – the more experienced they are, the better
The amount of production financing requested – larger loans may have lower interest rates than small ones, since a certain level of administrative cost has to be recouped, no matter what size the loan
The bankability of your financing sources – known, solid sources make banks more comfortable than unknown entities that may themselves pose some risk
The completion and delivery risk – the lower, the better
A bond or completion guarantee – having one can lower your rate
Production insurance – a must have

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