The Easiest Way to Acquire a Gap or Super Gap Loan
The super gap is a specific type of loan where you can borrow film production tax credits more than what you actually owe and pay interest in return.
This is basically the same concept as a mortgage or line of credit, and it’s something that is available for most banks in Australia. But there is a bit of a catch.
It’s very easy to apply, and you need a guarantor. However, you have to pay a higher interest rate if you do not have a good credit score.
Can Film Financing Companies Lend A Loan Gap Or Super Gap?
Film Tax credit lenders must meet certain criteria before a bank would consider providing a gap loan or the film tax credit. Banks often fund between 10% and 40% of a film’s budget. However, only around a quarter of a film’s total budget is borrowed from film financiers. Without multiple significant pre-sales in place, banks are unlikely to gap finance a picture.
As a result of the pre-sale, it is clear that there is a demand for this sort of picture and that the sales forecasts provided by a sales agent are correct. The sales agent is one of the most crucial aspects of a gap transaction; the bank must be satisfied with them.
A company’s longevity in business, reputation, and past work on gap transactions are all taken into account. Sales projections for rights that have not yet been sold are an important consideration when deciding whether or not to continue with a deal.
The bank must analyze and evaluate all sales projections before they can continue with the transaction. In most cases, banks prefer to lend the whole budget, including pre-sales and other kinds of collateral, such as tax rebates and government subsidies.
Ways To Get A Gap Or Super Gap Loan For Film Tax Credit Lenders
- You have to have a good credit score, but it shouldn’t be too bad either. You should at least be able to make all your payments on time.
- You need to prove that you are not already paying off any other debts, as this could affect your credit score. So you’ll have to show that you don’t owe much money in other places and you haven’t missed any payments.
- It helps to have the right paperwork ready to hand. For example, you can find out how much you are spending each month, which will help you determine whether you can afford a loan from film tax credit lenders.
