Feature Film Funding

COMPLETE GUIDE
Table of Contents
Finding film funding is often the hardest part of making a movie.
But it is not impossible! Films are either called studio films or
independent films. Unless your project is being entirely funded
by a major studio, it will be classified as an independent film.
In most cases, it's up to the producer to secure the funding to
make the film.

It's important to understand that most independent feature films

find funding through a combination of sources. For example,
filmmaking grants, crowdfunding, and state tax incentives. Below
you will find a list of methods you can use to fund your film.

03 Crowdfunding
06 Tax Incentives

04 Private Investors
07 Pre-Sale Distribution

04 Equity Financing
08 Negative Pickup

05 Filmmaking Grants
09 Bank Loans

06 Product Placement
09 Gap Financing

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1.
Crowdfunding
Crowdfunding is one of the safest methods you can use, as
funding is often without strings attached or interest. To begin, CROWDFUNDING
create a crowdfunding campaign on your chosen platform. You P L AT F O R M S
will need to let people know why they should donate to your
Kickstarter
project and create audience incentives.
Indiegogo
Crowdfunding is an excellent short film funding method.
However, you will likely struggle to raise big money this Seed&Spark
way. Still, it is possible to partially fund your film through
Patreon
crowdfunding, such as using crowdfunding for a single aspect
of your movie. You will need to get creative and give people a Ulule
good reason to donate. One way to do this is to offer people
Slated
the ability to appear in your film or invite them to be special
guests at the premier.

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 2.
Private Investors
Having someone invest their own money in your project is a
no-fuss way to fund your film. The easiest way to do this is
to ask friends and family; people are more likely to give you
money if they know you.

Theatrical release poster It is also possible for strangers to privately invest in your film.
Pi, 1998
You will need to market investment opportunities, which you
Many filmmakers have can do by holding a fundraising event.
previously funded their
While crowdfunding is a donation, investors might wish to get
films through a series of
their money back. The terms on which you accept a private
small investments from
investment must be negotiated in detail before you receive
personal acquaintances.
payment. You should be upfront about the risks because there
For example, Darran
is no guarantee that people will make their money back. If
Aronofsky’s debut
possible, hire an entertainment lawyer to draw up contracts
feature film Pi.
for all investors, especially if they give you a significant sum.

3.
Equity
This method requires you to sell interest in either your film or
company in exchange for film funding. Equity is the measure
of how many shares and ownership a person has of a product,

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which is represented in percentages. Importantly you will need
to decide exactly what that percent means, which is most FREE CONTRACT
likely to be your film’s overall profit. Make sure to write up any T E M P L AT E
financial deals and the terms and conditions into a contract.
You can download a free
Some filmmakers also use equity to pay their crew and cast contract template in our
wages. Percents of the film’s ownership can be used as pre-production bundle,
incentives to get talented people on board. Keep in mind there but it is advised that you
is never any guarantee that a film will profit. On the other hand, have an expert look over
if your film is a surprise hit, you will still need to pay back your all agreements.
investors the same equity percent.

4.
Filmmaking Grants
Filmmaking grants and competitions take place year-round and include both
fiction and documentary funding. Often these have terms and conditions for
filmmakers (such as the film exploring a social issue). However, the best thing
about grants is that you don’t need to pay them back. Bookmark this updated
list of US film funding grants and a list of UK film funding sources.

Most importantly, you need to carefully read the application rules, as many of them
have strict criteria. If you are making a low-budget film, using a mix of soft money
options is your safest bet. To get more significant investments, you will need to have
evidence that your movie can profit.

Lucky for you, we have already put together a list of the best film funding grants.

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5.
Product Placement
Watch any blockbuster movie, and no doubt
you will see many examples of product
placement. Big brands are willing to pay in the
millions to have their product on the screen.
Large sums like this are only for big-budget
Hollywood movies, however independent films
can still take advantage of product placement.
The second is to get cash for showcasing
products in scenes. To do this, go through your
script and highlight any props in your film that
could be a product. Next, you will need to contact
marketing agencies and see if you can find a
partnership, you can also contact brands directly.

There are two ways to go about this:

Heineken was rumored to have
The first is to accept the product for free, paid $45million for placement
and in return, you get a free prop or use of a in James Bond Skyfall.
location. For example, perhaps your film takes
Theatrical release poster

place in a nightclub, the owner of a nightclub Skyfall, 2012

might let you use the location for free, so long

as you advertise their business.

6.
Tax Incentives
Did you know that your choice of filmmaking location will save you money on tax?
You can also get bonuses such as equipment and local business discounts. These
are called tax incentives, and most regions worldwide will have their own version
of location incentives. These incentives were created to encourage filmmakers

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to shoot locally and not film abroad. You can save a lot of money by using tax
incentives, so long as your project meets their requirements.

You will need to go through each state and weigh up the benefits of shooting locally
or filming elsewhere. These incentives are not for very low-budget films, and each
state has a minimum production spend. Some states require you to hire local crew
or film within a particular area. Most independent films use tax incentives to part-
fund their film. Tax incentives are also very attractive to equity investors, as they
know part of the film funding has already been covered by the state.

Bookmark our complete state-by-state breakdown of US film tax incentives.

7.
Pre-Sale Distribution
One way to guarantee that your film will find an audience is to already have a
distribution deal in place before you make it. Pre-sale agreements are contracts made
with film distributors before a film is produced. You can contact film distribution
companies directly or through a sales agent and ask if they would be interested in
investing in your film. A distributor will assess a project’s profit potential based on the
script, attached talent, and producer’s previous work.

It is possible for a distributor to fully finance a film. Although more often, a pre-sale
distribution means that when the film is complete, the distributor promises to buy
the film for a set price. As a producer, you can then use the pre-sale agreement as
collateral to get out a bank loan or entice investors. This approach is high risk because
you will need to pay back the distributor in total if you fail to complete the film.

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8.
Negative Another form of pre-sale in filmmaking is a negative pickup deal.
This involves creating a pre-sale distribution deal with a film

Pickup studio. The studio agrees to purchase the movie from the
producer at a given date and for a fixed sum. Depending on the
agreement, the studio will receive the full distribution rights for
the film. In contract deals like this, the producer will need to
negotiate how much profit they will receive from distribution.

A negative pickup deal often only happens if the film is deemed

as being bankable. It’s unlikely that a studio will help fund an
independent film unless they know it will sell. The easiest way to
ensure that a film will sell is to get a major actor. With any pre-
sale agreement, the producer runs the risk of owing the studio
money. Similarly, if the production runs past its completion date
or is over budget, the producer might have to pay additional
costs to the studio.

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9.
Bank Loans
It is possible to use bank loans to fund your film, but you will
need to guarantee that you can pay the bank back. As an F U N FA C T
independent producer, you will have to be careful with loans, as
The Blair Witch Project
you might end up losing your house if you can’t pay back a bank.
(1999), was funded almost
One way to convince a bank to loan you money is by having a
exclusively with credit
pre-sale agreement. A bank will add up your film’s marketing
cards bringing in $35,000
potential to decide if it’s worth giving you a loan.
in debt but made more
There have been many credit card movies made in the past. But than $250 million.
this is not a sensible option for independent filmmakers. Make
sure to carefully read through all contracts.

10.
Gap Financing
Gap financing is when a filmmaker gets out a small loan to fill the ‘gap’ between
what they have raised and what they need to make the film. Since filmmaking is a
high-risk venture, loans tend to reflect this risk with high interest and charges. It’s
worth mentioning that interest is less likely to be fixed.

Another strategy is called slate financing, this is a new and complex method. This
involves a producer making a deal with a studio to create a collection of films. This
type of funding makes sense when making a film series. Slate funding comes from
various high-risk sources, including hedge funds, private equity, and bank loans.

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Conclusion
As you can see, film funding is not so simple. Film schools (unfortunately) don't
usually teach filmmakers how to attract investors and secure distribution deals.
As a producer, you will need to teach yourself the business of film financing. This
is why it's a good idea to start with a lower-budget film and soft money funding
options. If you plan on making a higher-budget film, invest in an experienced
producer and entertainment lawyer's advice.

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