Illinois Business Loan for Motion Pictures

Thunderclap

Thunderclap

For my next project I'm looking to the state for support in financing since I don't know any wealthy individuals. The state offers state residents a loan program with certified financial institutions (i.e. banks). While I don't intend to make a film that tanks their is always the possibility the movie going audience won't like it so my concern is payback to the financial institution.

If I set up a new LLC and use that as the applicant for the loan (I would have to name myself as contact person) and the film tanks would the financial institution be able to come after me individually or could they only go after the LLC?

This may not even become an issue because we are close to signing a distribution deal for this film so with a letter of intent to distribute we will definitely see the film released... it's just a question of how much money it makes and what can be paid back.

Comments?
 
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Directly related to Thunderclap's question, is there an online database of these state-funded support programs? I know there's EVERYWHERE in Canada, but in the states, they're rare.

Don't bother looking in Florida. They do have such a program, but only if you make a pro-Florida propaganda film. Don't film in Florida! They HATE filmmakers!
 
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The reality is very few movies made return their investment. This is why there are few certified financial institutions willing to underwrite a movie production.

The way I understand it, if your film is made under an LLC you, personally, cannot be held liable. Another reason why very few certified financial institutions willing to underwrite a movie production. If the movie made doesn't defy the odds the certified financial institutions is stuck with the loss. That's why a certified financial institutions is very conservative when loaning businesses money. And that's why almost no movies are financed this way. I don't know of even one example.

However, if you can jump all those hurdles and get a certified financial institutions to loan your newly formed LLC the money, then you can get your movie made. Even with an LOI from a distributor, getting a certified financial institutions to loan you or your newly formed LLC the money is a high wall to climb. Certified financial institutions know an LOI is pretty worthless. The distributor isn't obligated to pay you money up front or even to release your movie. What you need is a guarantee of distribution with a dollar amount attached. Of course if you have that, then you can find private investors.

Robert - I don't know of any database. Some states have state funded programs similar to the ones in Florida. When it comes to offering tax payers money, the governments need to have control over the final product. You can imagine how a "blue" states citizens would react if the tax payers funded a movie with a pro Bush administration theme. Or a "red" states citizens would react if the tax payers funded a movie with a pro life theme. So they must be VERY careful. Florida will fund a pro-Floridia propaganda film and not a movie where swamp dwellers are seen stalking and eating tourists. Same with all states. Though if that movie drove people away from Disney World and out here to Disneyland instead, maybe California would pay for it....
 
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