Film Accounting Glossary
Soft money
What is soft money?
Also called soft financing.
Soft money is the part of a financing plan that comes from incentives, rebates, grants, and subsidies rather than from equity, debt, or sales.
It is called soft because it is not cash in hand at closing: most of it arrives after wrap, subject to audit, and often has to be borrowed against in the meantime. A budget that looks fully financed on soft money can still fail on cash timing, which is why the cash flow schedule matters more than the totals.
Example
An $8.4M plan with $2.1M of credit and $400,000 of deferments has $2.5M of soft money. None of it is in the bank at closing: the credit lands eight months after wrap and the deferments may never be paid, so the cash flow matters more than the total.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The part of the financing plan a lender examines most carefully, because it looks like funding and behaves like a promise.
Common mistake
Reading soft money as funded. It arrives after wrap, subject to audit, so it has to be bridged, and the cost of bridging it belongs in the budget.
Related questions
- What counts as soft money in film financing?
- Incentives, rebates, grants, and subsidies: value that reduces the net cost of the picture without being cash in the account at closing.
- Why is soft money risky?
- Because it is contingent on audit and arrives late. A budget that looks fully financed on soft money can still fail on cash timing.