Hi, all. Looking for answers on the value of having presale contracts. As a producer, if a sales agent secures $2MM in presale contracts for my project, and the project's gross budget is $2.5MM, can I get a loan against the presales for more than 80% of the presales? So, in this example, can I borrow $1.6MM using the presale contracts as collateral? Any help is GREATLY APPRECIATED! Thank you~
Financing / Crowdfunding : Presales financing by Donnalyn Vojta
Screenwriter at Mr. Noodles Productions, LLC ♦ Screenwriter
2 weeks ago
Presales financing
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Hi Donnalyn Vojta, Good question, a bit more complicated than can be answered here however. I suggest you speak with a sales agent and/or an entertainment attorney. Ostensibly this is how pre-sales financing works. One must consider, be knowledgeable of, and take into consideration: market conditions (how are lenders valuing sales currently), lending factors (LTV loan to value) parameters, deposits on sold territories received, etc. This is in addition to the many other factors which might affect a loan against territories, including the project, genre, participants, principals, and overall finance plan elements.
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Hi Donnalyn, this is such a smart question to be asking, and it’s exactly the kind of scenario indie producers need clarity on when building a finance plan. Tiffany Boyle, President of Packaging at Ramo Law, just started a fantastic conversation here in the Financing Lounge that dives into thinking like a financier and structuring deals. It might be a great place to pose this question and get advice from her and others in the community. You can find it here: https://www.stage32.com/lounge/fundraising/How-Indie-Filmmakers-Can-Star....
Looking forward to learning from the discussion too!