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22
Jul

It’s Harder to Secure Financing For Ultra-Low Budget Films, But…..

The reasons are numerous, but the most apparent ones that scare the investors away from ultra-low budget films are:

  1. Low budget films are far less likely to succeed, which mainly is because of lack of a marketable star in the film’s cast.
  2. Foreign sales agents would not be interested because without a star they would not be able to determine a film’s value in international markets.
  3. Some industry insiders say that 90% of them never reach completion and see the light of day. This could be because of their inability to qualify for a completion bond that would insure the investor against the project being dumped prematurely.
  4. Dealing with less-experienced personnel in general, director, producer, attorney etc., eats away too much of a financer’s valuable time.
  5. Extra paperwork becomes too cumbersome for all parties involved.
  6. For majority of such projects, the dollar-for-dollar returns don’t justify the extra time and resources invested.

On the contrary, the good news is that the advancements in technology have made available to filmmakers the resources that were unaffordable only a few years ago. A movie that would have taken $2.5 million to make ten years ago can be made for a tenth of that cost now.   

Just to be clear, this is not about bashing low-budget indies. I’m just frankly addressing the question that has been posed to me several times a day since starting FilmClosings.com: Why are they so hard to finance? There is still a place and a market for low-budget indies; it’s just a different type of market with fewer set points of entry than for higher-budget indies. The reality is, ultra-low-budget films have to overcome bigger obstacles to achieve lower cash returns.

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