Launch Financing Scales Short-Term Loans for Indie Productions
Launch Financing, a film finance specialist, will be expanding its gap loan services for the indie market domestically and in both Canada and the UK in the wake of a new institutional senior credit facility. Brandon Blake, entertainment lawyer at Blake & Wang P.A., shares the news.
Loan Expansion
Launch Financing has already helped with more than 60 loans for smaller productions, offsetting the loan amount against committed production receivables such as tax credits and pre-sales. This new $15M senior credit facility, which will extend to $25M over time, will now be on offer through an agreement with Pier Asset Management, a specialty lender.
Cash flow issues are common for smaller productions, with extended timelines often delaying expected money during shoot time. This standardized loan structure has been specifically designed for a short diligence and clearing period, hoping to support small projects with immediate cash flow better.
How Better Cash Flow Helps
Indie productions can choose to put up production incentives, library-backed corporate guarantees, distributor minimum guarantees, committed equity, pre-sales, or institutional capital to secure the loan. Typically, it will then run between 8 and 26 weeks, repaid once the anticipated receivable arrives.
This allows the project to cover its production cash flow needs, including union deposits or cash escrow as well as production and finishing funding, without cash flow stalling. Given that much of Launch Financing’s lending team have themselves acted as producers as well as the institutional capital on the other side of the table, they are well placed to understand the indie industry from the inside.
While taking a loan during production can be a fraught process, this type of loan structure does at least account for guaranteed funds, while closing that critical timing gap that can derail production plans. It’s good to see more options open to support smaller productions, and we can hope to see facilities such as this expand as demand for smaller and boutique projects at the box office grows.
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