GLBAL
Investment & Funding

ENTERTAINMENT INDUSTRIES GROUP

FILM / TELEVISION PRODUCTION LOANS

Single or Multiple Project Loans allow the producer to obtain weekly disbursements of cash to cover costs estimated from the script breakdown and shooting schedule.

Financing, bonding and legal expenses are also paid automatically from a reserve established within the loan amount. The loan is repaid at the time the project is completed and delivered.

Loan Structure is as follows:

1- During the loan term, copyrights to the property are assigned to the Bank.

2- The value of the project is established by the combined collateral amount of presale contracts from creditworthy domestic and foreign distributors / licensers, Standby or Commercial Letters of Credit issued by distributors / licensers or Investors, cash invested by equity partners, pledged marketable securities and escrowed cash.

3- The collateral base is adequate to cover all production and financing costs and insurance premiums.

4- Reserves for financing costs based on usage are calculated from cash flow projections provided by the producer.

5- The Bank begins funding after equity investment has been confirmed.

6- Payment from distributors is due upon delivery and is remitted directly to the Bank.

7- To guarantee that delivery is made, a completion bond is obtained from an acceptable insurance company.

8- Once the Bank is repaid for its loan principal, interest and costs, the copyright is transferred to the appropriate party(ies).

Film Production Financing Guidelines:

The guidelines for the Entertainment Industries Group in providing film financing vary depending on the project and whether third parties are cash flowing part of the strike price for the project. As our Banker is strictly a lender, it does not take any creative risk in connection with a project; thus, repayment of the Bank’s loan cannot be tied or dependent on the project’s commercial success. The sources of repayment of the loan must be identified and qualified before the loan is documentation and production begins and must be sufficient to cover the strike price, all loan fees and documentation costs, estimated interest on the life of the loan, including a provision for events of force majeure, and the premium for a completion bond as well as any budget contingencies called for by the bonding company. If third parties, such as equity investors are cash flowing a portion of the project budget, the amount of the loan is adjusted accordingly. In all cases, the full amount of the Bank’s loan must be adequately collateralized by firm payment obligations. Acceptable collateral can include escrowed cash, marketable collateral held by the Bank in safekeeping, standby or commercial letters of credit from acceptable financial institutions, and distribution or licensing agreements with minimum guaranteed advances payable on or as a result of delivery by credit worthy domestic or foreign sub-distributors. Output deals are not acceptable. The credit worthiness of some third party payors may be enhanced by the use of standby or commercial letters of credit from acceptable financial institutions.

A Loan Application Package
should include the following materials as applicable:

1- Resume of the producer and director.
2- Chain of title documentation showing ownership of the project script.
3- Breakdown of the project budget.
4- Weekly cash disbursement schedule to allow for calculation of expected interest.
5- Copies of signed distribution contracts or license agreement for minimum guaranteed advances or a list of potential payors interested in the project.
6- Copies of any contracts with equity investors.
7- Name and telephone number of a contract officer at any financial institution to be issuing standby or commercial letters of credit.
8- Description of marketable collateral, if any, to be pledged to secured the loan.
9- Letter of intent to issue bond from completion bond company.

Key Benefits

• Allow the producer to obtain weekly disbursements of cash to cover costs estimated from the script breakdown and shooting schedule, include bonding and legal expenses is automatically paid from a reserve established within the loan amount. The loan is repaid at the time the project is completed and delivered.
  
  A loan structure usually based on the credit strength of third parties not on the producer.
  
  We may structure the funding arrangement to suit individual needs.
  Whether it's a matching fund arrangement or other alternative collateral pledged or marketable securities, etc. can be utilized. . . . . .

Capabilities

Minimum Funding $10 Millions, No Maximum. . .
Amount under $10 Millions possible, case by case basis. . .
 

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