How to Finance a Film: 9 Ways to Get

Funding for Your Film

Financing is the most crucial aspect of any film project because the production team
needs funding to pay for every step of the filmmaking process. Securing funding for a film
project can be an arduous task for filmmakers, but there are many viable financing
options available to pursue.

How Are Films Financed?

Most films are financed through a combination of investors, tax credits, grants, and other
sources. This funding must be secured (usually by film producers and sales agents) at the
beginning of a motion picture’s development, in order to pay for all the costs that accrue
during the making of a film. There are two main ways that this funding can be secured:

• Through a studio. The film studio handles most of the financing when a feature-
length film is being made under the umbrella of a major film studio (often called a
“Hollywood film”). The company producing the film is usually tasked with doing
the legwork to gather enough investors to fund the film.
• Independently. A film project made without the help of a major studio is called
an “independent film” or “indie film.” When a film is being produced
independently of a studio, it’s up to the film’s producers to secure financing for
their project. Independent filmmakers use their personal networks, tax credits,
and grants to patch together funding to make their film.

9 Ways to Get Funding for Your Film

There are a number of methods that you can take advantage of to secure film funding:

1. Grants: There are a wide array of filmmaking grants and fellowships available to
filmmakers, from government grants to grants offered by nonprofit organizations,
film festivals, and film institutes. While government film funds are usually lottery-
based or only require basic criteria, most other film grants are merit-based,
meaning that aspiring grantees need to go through an application process to
receive the grant money. Many grants require specific criteria; for example, there
are grants for first-time filmmakers, women, new-media storytellers,
and documentary filmmakers. There are also grants for every stage of the film
process, including development grants, production grants, post-production grants,
and distribution grants.
2. Tax incentives: In the US and Canada, there are a number of tax incentives,
deductions, or rebates available for shooting portions of a film, or housing a film’s
crew in certain areas, often to promote tourism in an area or take advantage of an
area during its off-season. These tax incentives apply to a variety of films including
documentaries and big-budget studio films. In film financing, tax incentives are
referred to as “soft money” because the filmmakers do not have to pay the
 incentives back. Tax incentives are not available until after a film production is
finished, and the film’s accounting team files taxes for the production.
3. Pre-sales: Pre-sales are a way to receive payments before a film is completed, by
selling the distribution rights to different territories (both North American and
foreign distributors) before the film is completed. In return, these financiers can
make requests for specific actors to be added to the cast, genres, or topics.
However, if the filmmakers can’t follow through with these requests, pre-sales
funding may collapse.
4. Negative pickup deals: Negative pickup deals are a form of debt financing, when
a producer sells the film project to a studio for a set price—but the money is only
available after the entire film has been completed. In the meantime, the
filmmakers will need to secure funding as normal, and will often have an easier
time securing funding because they can then ask banks to lend against the value of
the deal. These can be risky, though—if the film’s budget ends up going over the
figure offered by the studio, the film team will need to find a way to pay for the
difference.
5. Gap financing: In gap financing, filmmakers take out a loan from a gap company
against the film’s unsold rights—including box-office rights, streaming
permissions, and DVD sales. Gap financing presents high-risks for both parties,
because it’s impossible to predict how a film will perform in either North
American or foreign markets, and the estimated value of the unsold rights may be
inaccurate and yield a poor return on investment.
6. Private investors: Private investors are another avenue for getting a film
funded—whether it’s someone who wants to diversify their investment portfolio
or a wealthy person who just loves film. Private investors make up a very small
portion of film finance because investing in film is considered a high-risk venture.
7. Fiscal sponsorship: Fiscal sponsorship is a contract in which a film team can
partner with a nonprofit organization in order to receive tax-exempt status for
their project. With a tax-exempt status, a film project may be eligible for more
grants and tax-deductible donations.
8. Crowdfunding: To crowdfund a film, the production team will publish their pitch,
trailer, and/or cast list and ask members of the general public to submit individual
donations to help the team reach its goal. A number of small-budget films have
been able to raise a portion or all of their financing through crowdfunding
campaigns.
9. Product placement: Product placement is a form of film financing where
filmmakers agree to feature certain products or brands in their film, and in
exchange receive either free products (for example, high-end cars for chase
scenes) or direct film financing.