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What Are the Different Methods of Financing an Independent Film?

By Alan Rankin
Updated May 17, 2024
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Financing an independent film has historically been one of the most daunting tasks for any independent filmmaker, and some legends of the independent film scene have succeeded through daring financial schemes that paid off. Most experts, however, recommend traditional methods that offer less personal risk when financing an independent film. Among the many methods of financing an independent film are various types of debt, such as loans, credit cards and mortgages; using funds earned through other means; and convincing wealthy individuals or members of the general public to invest in or even donate to the film. Digital video and computer technology have made it easy to start small without the major expenses of typical 20th century filmmaking. Online funding and distribution options also can help, but finding funds remains one of the biggest challenges of filmmaking.

To finance his breakthrough film Hollywood Shuffle in 1987, director Robert Townsend “maxed out” his credit cards, taking a gamble that his film would be finished and released. A decade later, Kevin Smith sold his valuable comic-book collection to finance his film Clerks, and director Robert Rodriguez worked as a medical test subject to earn his starting cash. Independent filmmakers are often inspired by these stories, but for each story of high-profile success, there are many failures. Traditional financing methods can protect a filmmaker if a film project is delayed or canceled.

Some filmmakers, such as director Penelope Spheeris, recommend perfecting a script and other production details before any attempt at financing an independent film. A short version of the film, even just a fake coming-attractions trailer, can play at film festivals and convince potential investors of the project’s feasibility. A school that has a strong video/film department can provide material support, including equipment, stages and facilities. Private and state-sponsored arts grants also might be available. The traditional alternative is to convince investors, including well-off friends and family members as well as venture capitalists, to fund a project for which no return is guaranteed.

Financing an independent film once meant raising money for film stock, editing bays and finished prints, in addition to other expenses. Affordable alternatives such as digital video have reduced these up-front costs, but a filmmaker still has to pay for cast members, crew members, equipment, locations and even meals. Some of these expenses can be deferred or reduced, but others inevitably will come out of the filmmaker’s pocket. It is not recommended, however, to create large debt burdens, such as maxing out credit cards or mortgaging a home.

The rise of the Internet has offered alternative means for financing an independent film. New funding models such as the “threshold pledge system” allow ordinary people to contribute to the work of a filmmaker they admire. Some directors, such as animator Nina Paley, have chosen to release their movies on the Internet, using a business model similar to self-publishing. Even with these options, creating and financing an independent film requires a combination of talent, business skill and luck. The filmmaker who succeeds in finding a distribution deal can recoup investment costs, and if all goes well, can even have some money left over.

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Discussion Comments
By AnswerMan — On Mar 06, 2014

@Cageybird, I don't know if I would have spent all of that college money on a low budget film like he did. I've always wanted to make a movie myself, but I think if I did it, I would only film as much as I could afford at any one time. Digital film doesn't go bad. If I had enough extra money to film one scene, I'd get all of my actors and crew together for one day and shoot that scene as fast as possible. If I somehow made more money, I'd shoot a few more scenes. Even if it took me three years to finish the movie, I at least wouldn't be in debt.

By Cageybird — On Mar 05, 2014

I played a small role in a local independent film about Robin Hood. The director/writer/producer was a 16 year old film buff who had only made one short movie before starting the project. He actually paid the lead actors decent salaries, used professional film equipment and hired professionals to build the sets. I was amazed at all of the things he was able to provide on set.

As it turned out, his father was a prominent local physician from a wealthy family. The man offered his son a choice between financing a movie or attending the college of his choice. The son chose to finance the movie, which turned out to be less than marketable.

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