Film Accounting Glossary
Bridge financing
What is bridge financing?
Also called bridge loan, or bridging.
Bridge financing is short-term borrowing that covers a timing gap between when a production needs cash and when committed money actually arrives.
The classic case is bridging a tax credit or a distributor payment that will not be received until months after wrap. It is secured against that specific incoming receivable, and its interest cost is a real budget line that inexperienced producers routinely forget.
Example
A $2.1M refundable credit will not be paid until roughly eight months after wrap. The show borrows $1.9M against it at 9% plus a 1.5% arrangement fee, costing about $145,000. That cost is a budget line, and it is the one producers most often forget.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The financing plan, secured against the specific incoming receivable, with interest and fees budgeted as a cost of the picture.
Common mistake
Financing against a tax credit without budgeting the interest and fees. On a multi-million credit collected months after wrap, that omission is six figures.
Related questions
- Why do productions bridge tax credits?
- Because the credit is paid months after wrap, following an audit, while the money is needed during the shoot. The bridge covers that timing gap.
- How much does bridging a tax credit cost?
- Interest for the period plus an arrangement fee, and the lender advances less than face value. All of it is a real budget line, not a financing footnote.