Types of Film Financing

Funds from film financing can come from a variety of sources and it is extremely likely that every film will use some combination of several of these sources in order to finance the film. First we must review the several sources of film financing before a more in depth view of the subject.

The major sources of film financing are equity financing and debt financing. Equity financing is typically represented by obtaining funds from outside the production company or for financial involvement in a particular project. It is extremely important to confer with a qualified, licensed attorney before embarking on your fundraising plan. This area is fraught with pitfalls. For example, if you are seeking funding from an individual or entity that you have a prior relationship with it is unlikely that you would be required to make any securities offering pursuant to SEC regs, however, if you are making what amounts to a public offering, then there are some very technical rules you must comply with.

The filmmaker may seek equity financing by selling the rights to exhibit and distribute the film, prior to the filmâs completion. The filmmaker may also obtain funding by obtaining loans (debt financing) so that cash is...