Film Accounting Glossary
Interim financing
What is interim financing?
Also called interim finance, or presale discounting.
Interim financing is borrowing used to fund production against money already committed but not yet received, most often presale contracts and incentive claims.
The lender advances against those contracts at a discount reflecting collection risk and timing. It is distinct from gap financing, which lends against sales that have not been made at all, and it is correspondingly cheaper.
Example
A lender advances $2.8M against $3.2M of signed presales, discounting for collection risk and timing. That is cheaper than gap, because the contracts already exist and the buyers are known.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The debt layer between presales and gap. Its cost depends on the buyers' creditworthiness as much as on the amounts.
Common mistake
Confusing it with gap. Interim lends against contracts that already exist, so it is cheaper; gap lends against sales nobody has made yet.
Related questions
- What is interim financing on a film?
- Borrowing against money already committed but not yet received, most often presale contracts and incentive claims, advanced at a discount.
- How is interim financing different from gap?
- Interim is secured on signed contracts and known buyers. Gap is secured on unsold territories at estimated value, so it is priced considerably higher.