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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.

Which Is the Best State for Film Incentives

It takes a huge budget, mostly in millions, to produce a film. So, it comes as a relief when film financiers can save some money or get incentives for the film production. There are several different film incentives offered by various states of the US to promote film production in their state. 

The film tax incentives might be in the form of tax credits, grants, bonuses, etc. There might be other incentives too like free locations. If you are looking to book a location for your next film, keep reading to know the states that offer the best film incentives. 

California Film Incentives

In California, filming is one of the biggest generators of revenue providing jobs to over 700000 people in the state. As such, the state offers some of the best film incentives for film production in California. 

In this state, the motion films and TV series are eligible for 20 to 25 percent of tax credit if they meet a certain criterion. For independent films, they can get up to 25% tax credit if they have a budget of $1 million at least. Feature films that are produced on a budget between $1 and $75 million qualify to receive 20% film tax incentive. 

To receive the film incentives by state, you need to carry out at least 75 percent of the production process in California. 

Georgia Film Tax Credit

The state of Georgia offers transferrable, refundable tax credit as a part of the film tax incentives for film financiers. To get the film incentive, you have to ensure that all production work, pre-production and post-production tasks take place in the state. 

The films are eligible to get 20% tax credit. But you can get 10% more film tax credit if you include a logo at the opening scene which says “made in Georgia” and you also have to include links of Georgia’s website to the landing pages of the film’s site. 

Illinois Film Tax Incentives

In this transferrable and refundable tax credit, 30% credit is given to feature films. This film tax incentive is also given to short films that have a minimum budget of $500000. If you hire local people for work on the film sets, especially from underprivileged areas, you will be eligible get an additional 15% film tax credit. 

There are several states that offer the best film incentives. You have to do your research and see which location suits you the best and which of the film tax incentives are appropriate for film financiers. You can’t always pick the state with the highest incentive as your film needs a certain location. So, do your due diligence and shoot away.