Film Accounting Glossary
Loan-out company
What is a loan-out company?
Also called loan-out, loanout corporation, or personal service company.
A loan-out company is a corporation an individual forms to contract out their own services, so the production engages the company rather than the person.
The production pays the loan-out gross without employee withholding, and the individual takes salary from their own corporation, which can carry tax and benefit advantages. Productions require a W-9, a valid EIN, workers' compensation coverage, and often a personal inducement letter before treating anyone as a loan-out.
Example
A production designer contracts through their own corporation. The production pays the corporation gross with no employee withholding, and the designer takes salary from it. Before treating anyone this way, accounting wants a W-9, a valid EIN, workers' compensation coverage, and often an inducement letter.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Standard for above-the-line and senior below-the-line personnel. Set up at vendor onboarding rather than at first payment.
Common mistake
Paying a loan-out gross without collecting the W-9, EIN, and workers' compensation evidence first. The production carries the exposure if the structure does not hold up.
Related questions
- How does a loan-out company work?
- An individual forms a corporation that contracts out their services. The production pays the corporation gross, and the individual takes salary from it.
- What does a production need before paying a loan-out?
- A W-9 with a matching EIN, evidence of workers' compensation coverage, and often a personal inducement letter tying the individual to the deal.