REEL DEAL: Mind The Gap: Hard Money and Gap Financing
Serious hard money marketplace financers including banks and Ingenious require the attachment of credentialed sales agents with credible sales estimates and Irish producers need to deepen their relationships with as many sales agents as possible.That was the key message from the Hard Money session at the Reel Deal, which also warned producers to allow plenty of time to close their financing and legal contracting as pre-closing pre-production cashflow was becoming harder and harder to come by. Speakers included Adrian Ward (ICB Entertainment), Pauline Burt (Mansfield Associates). Paula Jalfon (Ingenious Film & Television Ltd) Geraldine East (A&L Goodbodys)
Ingenious’ Paula Jalfron advised producers as a priority to get to know all the sales agents, some of which, she noted, were acting more and more as executive producers helping to pull financing together and having close relationships with bank gap financiers.
Banks typically insist on seeing “free and clear indicators that the market is responding to the project” by way of two presales and good coverage on sales estimates of up to 200% as part of their risk assessment process, which also includes consideration of the script, casting talent, director and producer track record.
Jalfron said Ingenious would launch a new fund by year’s end, investing in films with budgets ranging from £3m to £120m for an average of £7m. The Fund would be similar to Ingenious’ previous product Inside Track which provided 33% of the budget.
A&L Goodbody’s Geraldine East advised producers to see a lawyer before they start giving things away to get the film financed. Addressing the vexed question of pre-closing pre-production cashflow, East noted that the in the present multiple investor financing climate producers sometimes pushed films into production before they are ready, sometimes with only 75% of financing confirmed.
“Being financed is like being pregnant - you can’t be partly financed and go into production,” said East, adding that the UK Film Council now refuses to provide any pre-production before everything is closed. Jalfron agreed and strongly urged producers to leave plenty of time for legal contracting.