Almost obtained funding for first movie...help

R

robo3687

Ok so I've had a movie in pre-production for a few weeks now and have come to the conclusion that the equipment I have is not up to scratch and I need something new, but don't have the funds. So yesterday I figured it couldn't hurt to put some ads in free classifieds on the net to see if anyone would like to put some money into this movie.

Granted I never thought that it would work but I checked my email this morning and I had an offer from MLC Capital Inc. in London wanting to take a close look at the details of my project as they are interested in providing funding for me.

i was like :yes: :D :lol: :cool:

but there are a few things I need a bit of help with...they would like a business plan from me to review but I'm not sure on what I should include in it?

I said in the ad that I was preparing for my first major movie and that I was short on funds to cover equipment and such.

Oh and this is the website of MLC Capital Inc. if someone would look over it for me to see if there are any catches that I'm missing (I'm not incredibly financially minded). Also I am unclear whether the money they are offering will be mine or if I'll have to pay it back at some stage..?

http://www.mlccapitaloffshore.com/Index.html

Thanks for your time
 
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Generally investors invest because they want to make money on their investment, that's what they do for a living and I'm pretty sure that the money they put in they will want back at some point with interest. They are a business for a reason. Putting a business plan together is a great idea because it will help you to plan and figure out every step of your production from pre-pro to distribution. They want to see that because they want to see if you have figured out how to make back any kind of return for their investment. Before you say yes to any kind of deals make sure you do your research. You can find examples of business plans on line. They are not fun to put together but are necessary.

good luck.
 
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thanks for the reply

I have sent another email to the person who contacted me asking a couple of questions about some things i wasn't sure of so we'll see how that goes
 
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well I got one back and my questions were answered

1: they only needed to know how much I needed and how I was going to spend it
2: the money is in the form of an interest only loan (which I pay back when I make money out of it)
3: I have to be an incorporated business to get funding...

the last one is the one that shot me in the foot...as I ain't no business....

but maybe someone else will take me up on my offer....lol
 
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You can become incorporated for about $100 in most places.. not sure on current Australia incorporation costs and such, but it really doesn't take that much, though there are a whole set of other rules for taxes then generally. Contact the local small business bereau and see what they can tell you.

The part I'm leary about there though is the interest only loan. I think your understanding of it is a bit skewed. That sounds to me like you would be paying interest throughout the course of the loan (as normally one would, when they buy a home or car or whatever) but in this case, you don't make any repayment of the principle balance until a future date.. There has got to be some kind of firm date established in their contract though that causes the repayment term to begin.

You could get the same results from going to the bank and taking out a personal loan, or getting a home equity loan or similar. I think you might want to look into finding some grant money, which you don't have to pay back. Also you should work up a complete budget for the film with all the above the line and below the line costs, to have ready to present to potential investors. If you're seeking investment from private parties & institutions, I assume this is a feature-length project that will have some marketable value, if not you're truely wasting your time unless you seek grant money.

Good luck.
 
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robo - you are in way over your head. This illustrates the downside of asking for money before you are really prepared to ask for money.

An interest only loan that you pay when you make a profit is a great money making offer for the investor. You will be harmed by this deal. Of course they are only interested in how much you need. No matter what, they are going to see a large profit - even if your movie doesn’t make a profit - and that money is going to come out of your pocket.

I don’t know anything about doing business in Australia - but this interest only loan is a really bad offer. Check into it very carefully before you accept their money.
 
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Generally investors invest because they want to make money on their investment, that's what they do for a living and I'm pretty sure that the money they put in they will want back at some point with interest. They are a business for a reason. Putting a business plan together is a great idea because it will help you to plan and figure out every step of your production from pre-pro to distribution.
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That's a great advice, a good reliable business plan is what you need, this way you will have no trouble attaining cash advance and get things rolling in your own way.
 
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It's seems to be a legit company, but a very poor way to finance a
business - you are taking out a loan with a high interest rate - and
there is no way they would loan money to a filmmaker with no
track record. They are set up to loan money to businesses. Unless
you have been in business - and I mean an active, tax paying,
profitable prodCo - for several years they might try to sell you on a
personal loan. Essentially a high interest line of credit.

The reality of financing a movie is that people with money know more
about it than you do. A business plan is nearly worthless. You'll need
one if you are going after experienced and accredited investors, but
(once again) they will know more about the business than you do.
 
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