How are Movies Funded?

Making a movie is an expensive proposition.  Even when things are done on a shoestring budget, films costs can spiral.  Unless a person wants to be like Robert Rodriguez who self-financed his first feature film, El Mariachi, by participating in medical trials, funding sources will need to be found.  Here’s a brief look at how films are funded in the United States, the United Kingdom, and Australia.


In the United States, films are usually funded by the big Hollywood Studios who will use their own cash to finance a project they’ve approved.  Studios will also use bank loans and ask for investment funds from wealthy parties, investment specialists, or entrepreneurs.   Production companies can also play a huge role in the funding of a film; some companies will front all the cash necessary to make a movie because they’ve got an advance deal or think they can sell the film directly to a distributor.


Some individual states in the U.S. will also offer tax incentives as a method of movie funding; some banks will also offer 0% interest loans to film projects.


In the United Kingdom, film funding is through private investors or the British Film Institute, which oversees the allocation of Lottery funds for U.K. film financing.  Filmmakers usually receive film grants.  There are also tax incentives.


In Australia, up to 30% of a film can be funded through grants distributed by Screen Australia, and there are also state and federal incentives for filmmakers and post-production projects.  The country also offers a tax incentive called the Australian Screen Production Incentive,  which is designed primarily for private investment in television programs, films, and documentaries that are Australian produced.


Films that are independently produced in Australia without the backing of big production companies or funds from Hollywood studios will usually receive more in the way of grants.  To qualify for these grants, however, filmmakers must prove that their projects contain “Significant Australian Content”.  This means the project must either have a content matter that is “Australian”, cast and crew who live or reside in Australia, and other details. 


Independent movie makers will probably receive a film grant, however, they will usually still need to find private investors and this is where the search for funding can become quite creative.  As mentioned earlier, the low-budget film El Mariachi, which cost director Robert Rodriguez US$7000 to make, a minuscule budget by industry standards, was funded entirely by him participating in medical trials.  Others who look for funds may ask friends, co-workers, relatives, and close family for help.  This also has its drawbacks; one independent filmmaker described how one “investor” insisted on being present for the entire shooting schedule, offering “tips” to cast and crew, although he had no experience whatsoever in the film industry.


Before draining your life savings, equity in your home and possibly destroying your credit rating, investigate what sort of movie funding is available in your country; you may find that grants, tax incentives, and groups of investors can help you considerably.