UK Film Financing Explained
Are you looking at financing a film but not sure how the process works? Investing in film can be a rewarding and profitable investment. Although there are risks, the payout can be much higher than other forms of investment.
The UK film industry is booming at the moment. In 2018, UK cinema admissions rose to 176 million, driving revenues up by 4.4% and this increase has become a trend over the past 5 years. With more independent movies and big name blockbusters being produced in the UK, as well as the rise of streaming services, now is the perfect time to invest in movies.
How do mainstream films get financed?
Mainstream films can be financed in a number of ways. There are many funds and grants available to filmmakers which makes financing films a little bit easier. There are also options available with film production companies who will find investors willing to fund or part-fund new films. A few examples are included below:
The British Film Institute was set up as a charity but is funded by the UK Government and the National Lottery. Their aim is to support new talent in the industry, but with relatively large funding and often large-scale release, their films can become mainstream quickly.
Film Production Companies and their investors
Another way mainstream films are financed is through film production companies. These production companies will encourage investors to invest funds into their films and often give a certain guarantee of (at least some) money back with schemes such as EIS.
There are a few other ways mainstream films get financed. One is the use of product placement. For example, a film company may partner with a drinks company and only show actors drinking their products for a fee. This can be very lucrative for film companies, especially if they partner with a larger company.
How do independent films get financed?
If you are looking at financing an independent film there are many options available to you. For independent filmmakers, the number of grants and film funds you may be eligible for vary but often there is at least one you can apply for. These grants are often not for large amounts of money as they aim to finance smaller films or many films a year. Some examples of UK based film funds are:
A fund looking for new talent to work with. This fund is also specifically interested in branching out filmmaking from London, so regional based film projects are often more successful.
Regional based film funds
There are a number of regional film funds which you may be eligible for if applying in a certain area of the UK. There are regional film funds for:
- Film Cymru Wales
- Film London
- Northern Ireland Screen
- Screen Scotland
- Yorkshire Content Fund
- West Midland Production Fund
- Isle of Man Digital Creation Screen
- Liverpool City Region Production Fund
This is a fund for filmmakers looking to make their debut film. They support around 10-15 projects per year.
Many new filmmakers try to use crowdfunding to raise money to finance their movies. This has varying levels of success – generally depending on the content of the film being made. Often if your film tells a personal story or something very unique you may have a better chance of raising the funds for your film. One example is Crowdfunder.
How do film financing companies work?
Film financing companies work by gathering investment for films by various means and ensuring the distribution of these finances is carried out in the most cost-effective way possible. Film financing companies will often work with individual investors, banks and other funding options (such as funds and grants) to obtain their level of funding.
When this funding is secured they are responsible for ensuring returns on the investment. Depending on what country they operate in, they will often take advantage of Government tax break schemes or funding schemes. These help give security to their investors. In the UK the EIS scheme is helpful in securing investors, as there is a guaranteed return of some of the investment made. For more information on EIS check out our blog on The Benefits of EIS.
How can I help finance a film?
The extent to which you can help finance a film is dependent on how much money you are willing to invest. If you want to invest a smaller sum, for example under £5,000, then the best way to invest may be via crowdfunding initiatives or directly to smaller filmmakers. This money can make a huge difference to someone trying to make their first film or make a film independently of a production company. However, do not expect a red carpet release or box office hits as often (but not always) these films are shown in smaller indie film festivals or venues.
If you have a larger sum of money to invest, then consider a film production company. A film production company will invest your money into a film they consider a guarantee to be released and make money. Often there is also a guarantee with these film production companies that you will get (at least some) of your investment back under the EIS scheme. These companies can guarantee a red carpet release, with additional perks such as credits in the film.
Films4U is a film production company dedicated to making quality films by connecting investors with filmmakers. We have over 30 years of experience making successful box office hits and partnering with new streaming services for the best returns on your investment.