Understanding the Completion Guarantee for Film
The completion guarantee for film is a unique promise that is made between the guarantor and the filmmaker that basically states that a film which is currently at some stage of production will actually be completed and delivered to a distributor within a specified time period. If you’ve never experienced a film production that is being prepared for the sole purpose of distribution in a high stakes scenario. You might not be aware of the completion guarantee and how it works.
But as an independent filmmaker, you should be!
What is the Completion Guarantee for Film?
The completion guarantee for film represents a unique contract that is issued by the completion guarantor. Which basically states that a film is on track to be completed and prepared for distribution according to specific script standards by a specified date.
In essence, it guarantees to investors and to distributors that a film will be produced, completely, regardless of potential financial hurdles or other complications which could arise.
The Completion Guarantor provides the completion guarantee which specifies the date by which the film will be produced and prepared for distribution. Should the film run into problems, such as running out of funds for production.
The guarantee states that the completion guarantor will:
- Loan the producer the necessary funds required to finish the film (this is referred to as the strike price).
- Take over the film themselves and finish producing it.
- Abandon the project entirely, paying out the financier for any investments made into the project including financing, interests, and other costs that were incurred.
A Promise
Essentially, the completion guarantee for film is like a promise by the guarantor that a film will be completed. And if for any reason that promise is not kept, that the investors involved will have their funds returned to them.
Should the film not be finalized for distribution as planned and on schedule.
Problems Solved with a Completion Guarantee
As a filmmaker, you might have had a financier, investor or distributor require that you obtain a completion guarantee in order for them to invest in your project.
If you’re wondering why that is, it’s because the completion guarantee can solve a lot of problems. That may otherwise prevent a film from being produced fully.
Protecting the Financier
The completion guarantee protects the financier that invests in your film. By guaranteeing that if you go over projected or budgeted costs of production? They’ll cover the fees so that production continues without a hitch.
It also helps in the event that there is an issue with principal photography. Should you have talent that walk away or other issues. The guarantee states that they will help to ensure the production continues to move forward.
And, if not? The guarantor pays back the investments that were allocated so that there is essentially no risk for the financier.
In Summary
As such, the completion guarantee for film represents a critical element of the film financing package. Which acts as collateral for the investments that are made to your production.
So, if you’re in a situation that involves a financier requesting that you have a completion guarantee, don’t fret! This is your chance to establish collateral that proves you will in fact finish your production and the film will make its way to distribution, one way or another!
