Export-Import Bank Backing Indie Film Loans

Makers of independent films who have trouble raising financing for their movies are getting some assistance from the U.S. Export-Import Bank.

The independent government financing agency announced a new program Thursday to provide loan guarantees to lenders who fund small, independent films. The guarantees could potentially cover up to 90% of the loan amount, and are aimed at making lenders less skittish about funding independent movies.

Unlike financing for films made by the major Hollywood studios, financing for independent movies is often loosely cobbled together.

Money is frequently raised by trying to sell in advance rights in foreign countries to show a film in theaters and on TV and to distribute it on video. Bank production loans are then secured by those foreign sales contracts.

Because some of the distributors buying the rights are in countries where economic and political stability is shaky, lenders are sometimes skittish about making the loans out of fear that distributors won’t make good on their contracts.

Through the new program, the Export-Import Bank will act as a safety net in case that happens, much as it does with U.S. manufacturers selling goods in countries with weaker economies. The program represents the first time the bank has extended its services to independent filmmakers.

Making the announcement along with the bank was Sen. Barbara Boxer (D-Calif.), who has been pushing for the program, and the American Film Marketing Assn., which represents independent film and TV companies.

Officials said the budgets of films eligible in the program will generally be from $1 million to $15 million.