Film Financing 5: Raising Finances For Your Film

Where do you find the money to make a film? If you are a new company with no operational track record or decent cash flow, you will find it difficult to find a bank that is willing to offer you an unsecured loan. In this article, I will outline the alternative sources of financing that film producers can look to.


Film distributors

There are a number of film financiers and distributors that are constantly on the lookout for a good film to invest in. Film distributors are able to finance a portion of the film’s budget. In a licence agreement, a distributor may choose to commit to paying an advance payment (i.e. a fixed percentage of the estimated budget of the film) to the production company in exchange for certain rights to the film in a particular country for a limited term.

Producers may also commit to entering into a joint agreement with a number of foreign distributors (called a “Co-Production Agreement”) who together may finance up to half of the film’s budget, and who share in the profits and losses of the film.

Film financiers and distributors determine whether to invest in a film based on their view of the strength of the project after reviewing aspects of the project including e.g. the script, the confirmed talent, and the marketing strategy.

Your family, friends or business acquaintances

Other than film distributors, the most likely source of financing (particularly for independent films) comes from the producer’s own family, friends and business acquaintances. The producer raises finances from them either through a loan (debt) or through equity (shares).

Film subsidies and grants from governments

Producers should also consider applying for film grants provided by governments which subsidises a portion of the film’s budget. There are numerous different types of film grants that one can apply for. For example, there is a Short Film Grant administered by the Singapore Film Commission (“SFC”), the Production Assistance (Film) Grant, the New Talent Feature Grant, and the Overseas Participation Grant.

Under the Southeast Asia Co-Production Grant, the SFC administers grants worth S$250,000 per film (capped at 50% of the film’s budget) for films that involve a producer from Singapore and a director from a Southeast Asian country.

There are various co-production treaties that Singapore has entered into which allow producers to tap on grants and subsidies from the governments of either or both of the partnering countries. These include the Singapore-Canada Audio Visual Co-production Agreement, the Singapore-Japan Film Co-production Agreements, and the Singapore-New Zealand Film Co-production Agreement, the Singapore-Korea Arrangement for the Co-production of Broadcasting Programmes, the Singapore-Australia Co-production Agreement, and the Singapore-China Film Co-production Agreement.

Investors and high net worth individuals

Equity financing often entails investors and high net worth individuals giving money as capital contribution for significant rights. Based on some research, it appears that the market conditions today make pre-sales much harder, it’s more likely today that a lot of the film’s budget would have to be funded by equity from such investors.

Singapore hosts ScreenSingapore, which is a marketplace for filmmakers, producers, distributors, financiers and film buyers to explore co-production opportunities, and pitch for financing deals, through the Southeast Asian Film Financing (SAFF) Project Market. More info here:


In a sense a type of pre-sale, some film projects have raised funds from crowdfunding from the public whether as a gift or a pre-sale of film-related merchandise.


In this section, I will focus on raising finances through several options.

Equity (shares)

Under equity financing, the investor (shareholder) becomes one of the owners of the company and is given a bundle of rights in the company. Shareholders have the right to declared dividends which are payable out of the company’s profits, and some shareholders have the right to vote at the company’s meetings.

Private companies can be structured to have different classes of shares with different rights and terms. E.g. a class of preferred shareholders can be given the right to priority in dividend payments from profits, over the ordinary shareholders.


Under this option, investors basically lend the producer money. Loans will generally be backed by security. It is likely that the producer or filmmaker will have to furnish a personal guarantee for the loan. This creates significant risk for the person. If the loan cannot be repaid, the individual may be at risk of bankruptcy.

Other security will likely include the rights in the film and intellectual property in and relating to the film. If this security is enforced, it is possible that the creditor can seize the rights in the film and sell or licence them out for money.


Pre-sales are sales made to film distributors before the film is produced (more in a subsequent article on distribution licence agreements). Generally, a production company must enter into a distribution agreement with a film distributor and give the distributor the right to distribute the film either locally or overseas. Distribution deals take different forms, including foreign or territorial distribution, domestic co-production, foreign co-production, and new media or video on demand (VOD) (e.g. Netflix).

If a pre-sale is entered, the distributor may:

  1. pay an advance upon execution of the agreement;
  2. pay milestone payments over the course of the production;
  3. guarantee to pay an advance upon completion and delivery of the film (and the guarantee can then be used as collateral for a loan);
  4. pay a share of the distribution revenues; or
  5. pay a flat fee.

Engaging a sales agent would be highly advisable to assist a producer in selling distribution rights to the film especially overseas and thus help raise pre-sales financing. This means that the script and talent team have to be really convincing.

Note that Goods and Services Tax (GST) may have to apply to pre-sales.

Investment Agreement

Under this option, the investor(s) enter into a contract with the producer to provide a certain amount of financing in consideration of rights to distribution of profits to the investor(s). The investment agreement will specify what rights the investor(s) have and the proportion of their financing and profits.

Caution about public fundraising

A producer should be careful not to raise funds publicly or to a large number of people beyond the producer’s personal network in exchange for shares or interest-payable debentures. In such scenarios, the Securities and Futures Act (Cap. 289) (“SFA”) stipulates that a prospectus must be registered with the Monetary Authority of Singapore (“MAS”) in a private or public offering.

A prospectus is a document to inform the potential investors of the nature of the company, its financial position, performance, profits and losses as well as the rights and liabilities attaching to the shares or debentures (loans). The prospectus must be signed by every director of the company. This allows the investor to make an informed decision as to whether to subscribe for the shares or purchase the debentures. Thus, there will be criminal and civil liability if a prospectus is not issued or if misleading statements are made that are materially adverse.

There are exceptions to the prospectus requirement. Under section 272B of the SFA, a company will not need to issue a prospectus if it falls under the private placement exception, whereby the offer of securities is made to no more than 50 persons within a period of 12 months, the offer is not advertised and no promotional expenses are incurred.

Series Contents

Film Financing Intro: Producing a film, writing a screenplay, or acting in a film? What you need to know to navigate the law and finance of the film industry

1: An Overview: 3 Things for Film Producers

2: Understand the Different Types of Business Structures

3: The 3 Important Approaches To Negotiating A Fair Deal

4: Negotiating A Fair Deal With Writers

5: Raising Finances For Your Film

6: An Introduction To Completion Bonds

7: Distributing Your Film – Entering Into Distribution Licence Agreements

8: Get To Know Your Film’s Intellectual Property Rights – Copyright And Trademark Protection

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