June 16, 2024
Finance

FinFilm Introducing Gap Financing, production services to Europe


Swiss start-up FinFilm promises to transform the European film sector with ambitious goals to make financing easy, predictable and transparent by offering gap and bridge loans and more comprehensive tailor-made financial and insurance services via state-of-the-art mobile technology.

FinFilm was founded by business lawyer Enrico Fadani and producer Michel Morales as part of their EF Advisory Group, which they established in 2019 to provide financial advisory services to the entertainment industry.

Based in Zurich, the company has regional offices in Munich and Rome and plans to soon open a branch in Spain. It also has operations in Mauritius, from where it is also financing projects in Africa.

Its current European projects include the Sky family movie “Robin and the Hoods,” a Swiss-U.K. co-production for which FinFilm provided gap financing. In Africa, it’s financing the Zambian drama “Lute,” which explores the forced marriage of minors, and the Mauritian biopic “Kaya,” about the late Mauritian singer of the same name, both with Mauritius-based production company Hero Entertainment. FinFilm also financed the 2021 documentary “The Mothers of Abductees,” about the emancipation movement of Yemeni women, which Morales produced via his Munich-based Aviv Pictures.

Aside from the U.K., gap financing has never really been available in continental Europe due in part to the wide use of state film subsidies, Fadani and Morales explain.

“The conditions for film producers have changed enormously in recent years,” says Morales. “It is becoming more difficult to obtain significant minimum guarantees. More and more producers are also considering whether pre-sales for their projects fit into their financing concept or not.”

While many producers are exploring the use of gap financing, it’s not something that is offered by any bank in Europe, particularly in German-speaking countries, he adds.

German banks such as Commerzbank only offer interim financing for German-speaking countries and a few international projects that producers realize with and for streamers, Morales adds. “FinFilm fills the gap in demand without taking anything away from the well-known banks. This makes us unique in Europe with our offer.”

The platform can provide gap financing of 10% to 20% of a film’s overall production budget.

Fadani points out that independent producers in Europe tend to start from scratch when they begin setting up financing for new projects. “So we thought that it was about time to set something up, similar to what you see in the U.S., to have streamlined financing services for producers where they know exactly how the process is, what the requirements are and what the terms and conditions are,” he says.

FinFilm’s website offers a detailed and transparent outline of the company’s activities, he adds.

The film industry is changing rapidly in German-speaking territories, Fadani stresses, explaining that in the past, German films were mainly produced for German-speaking markets and mostly financed through subsidies.

“This is now changing because what has been understood is that the current German subsidy system cannot survive as it is, so it will open to a more tax credit or tax cash rebate system, as you can see in France or in Italy. This will change the attitude of producers towards how they finance their movies.

“The second important aspect is gap always stands against unsold territories, so producers have the choice to sell less territories and close the financial gap with us, because selling territories in a very early stage of development means selling it under-value,” Fadani adds. “Taking in gap allows the producer to finish production and go to a market with a finished movie to get a better price for it.”

Fadani and Morales plan to expand FinFilm’s activities and make the company a one-stop solution to meet the financial needs of European productions by offering a full portfolio of services.

“We have now started on the financing side with gap and bridge loans,” Fadani explains. “We are now going to issue further services like escrow services for production, and credit cards for production, which are tailor-made for the needs of the production.”

Among FinFilm’s planned services is a blockchain-based smart contract with attached wallets to recoup international licensing revenue. “Now you have recoupment collection account managing firms, which are quite expensive and still use the old system of bank transfers,” Fadani notes.

FinFilm’s smart contract would, for example, allow a producer, sitting in a bar in Los Angeles a year after his film has come out, to check his smartphone and see that he’s received money generated by his movie in Korea — “no transfer costs, immediate credit into your wallet. That’s unique. Nobody does it.”

The company also plans to offer insurance services.

FinFilm is attending Berlin’s European Film Market, where Fadani will be discussing the challenges of film financing in Africa at the Feb. 17 inaugural edition of the AfroBerlin industry showcase, and, on Feb. 18, hosting a panel on gap financing.



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