A finance plan and a cash schedule answer different questions.
The finance plan shows how a production’s costs are funded. The cash schedule shows when each source becomes available. A plan can add up to the budget while still leaving the producer unable to pay costs when they fall due.
Keep a third document alongside them: the recoupment schedule, which sets out how receipts are applied and who gets paid in what order. These three views should reconcile, but they are not interchangeable.
Understand the role of each funding source.
| Source | Role in the plan | Question to resolve |
|---|---|---|
| Tax credit or production incentive | An expected receipt linked to qualifying production expenditure and scheme rules. | What net amount is expected, which entity receives it and when can it become cash? |
| Contracted presales or minimum guarantees | Contractual payments for agreed exploitation rights, potentially payable on delivery or other milestones. | Are the payment conditions achievable and is the counterparty acceptable to a lender? |
| Equity | Investment capital provided under agreed ownership, control and recoupment terms. | When is it paid, what conditions remain and how does the investor participate in returns? |
| Bridge loans | Cash brought forward against specified future receipts. | How much is available after reserves and charges, and which receipts repay it? |
Screen Australia’s industry glossary explains finance-plan terminology, including presales and cash-flow lending. Terminology varies between markets, so use the definitions in the actual agreements.
Do not count a bridge twice.
If an incentive is already included in the finance plan, a loan that advances part of that incentive is normally a timing mechanism, not an additional unencumbered source of funding. The same principle applies when borrowing against a contracted delivery payment.
Show the underlying receipt, the amount advanced against it and the amount reserved for repayment. If a loan has a different repayment source, record that explicitly. Also distinguish signed contracts from sales estimates: projected income from unsold territories is not a contracted presale.
A fictional £4 million production.
Illustration only—not lending terms or an eligibility opinion. Assume a production budget of £4 million, excluding financing costs. Its underlying sources are a £1 million net incentive receipt, £1.5 million of contracted presales and £1.5 million equity. These total £4 million.
For this example, the equity is paid before costs fall due; all presales and the incentive are received only after the full production budget has been spent. Assume lenders agree to advance 80% against each future receipt. All £80,000 of fictional financing costs are withheld upfront, with no additional interest or charges due later.
| Source | Underlying finance | Interim cash before financing costs |
|---|---|---|
| Net incentive | £1,000,000 | £800,000 bridge advance |
| Contracted presales | £1,500,000 | £1,200,000 bridge advance |
| Equity paid upfront | £1,500,000 | £1,500,000 |
| Total | £4,000,000 | £3,500,000 |
| Financing costs withheld | Additional cost outside the production budget | Less £80,000 |
| Cash available for the £4 million budget | Underlying sources match production costs only | £3,420,000: £580,000 short at peak |
Adding the £2 million bridge loans to the £4 million of underlying finance would incorrectly suggest £6 million is available without matching repayment obligations. Before the late receipts arrive, only £3.42 million is available to spend in this scenario.
When the £2.5 million of presale and incentive receipts arrive, £2 million repays the bridge principal, leaving £500,000. That release comes too late to solve the assumed peak cash gap. The production also needs an extra £80,000 of permanent funding for financing costs. Of the £580,000 peak requirement, £500,000 is a timing gap and £80,000 is the additional cost.
Possible changes to test include earlier contracted payments, a different advance or reserve structure, or extra committed capital. Each must be agreed and documented. The 80% advances and upfront cost treatment are fictional; real costs may accrue with time and extend the shortfall if payments are delayed.
What makes a presale usable for lending?
Review the executed contract, payment milestones, delivery materials, technical acceptance, termination rights and any set-off provisions. Identify the entity that owes the payment and the entity entitled to receive it. A headline minimum guarantee is not necessarily the amount or date a lender can rely on.
Ask how the lender will assess the buyer, the producer’s delivery obligations and any security or assignment restrictions. Match the contracted currency to the loan currency. Identify the cash required to reach delivery rather than assuming that delivery-linked receipts can fund the work needed to deliver.
Equity terms affect more than the cash paid in.
Record whether investment is committed, when tranches are due and what conditions must be met. Then review priority, any preferred return, profit participation, approvals, reporting and ownership. Two investments of the same amount can have different consequences for the producer.
Recouping an investment is not the same as earning a profit. For a simple fictional waterfall, assume £1 million of defined receipts is available for distribution, after all agreed prior deductions. If an investor first receives £600,000 to recoup its investment, £400,000 remains. A subsequent 50:50 split would allocate £200,000 to each party; the investor receives £800,000 in total, of which £600,000 is return of capital. This is only one possible contractual structure.
Agree payment priority and completion responsibilities.
Map where exploitation receipts and incentive payments flow, which accounts receive them and the contractual order of payment. Check the interaction between lenders, distributors, sales agents, equity investors and any completion guarantor. Separate receipts already committed to a particular obligation from freely available cash.
Screen Australia’s information for funding recipients illustrates how completion arrangements and equity recoupment terms form part of a production funding structure. Those are programme-specific requirements, not a universal waterfall or a guarantee of profitability.
Prepare a funding pack that reconciles.
- A production budget including contingency, with financing costs separately identified
- A finance plan distinguishing confirmed and conditional sources
- A dated cash schedule with draw conditions and repayment flows
- Incentive calculations and certification evidence from the production accountant
- Presale, distribution, investment and proposed loan agreements
- A recoupment schedule consistent with those contracts
- A plan for delayed receipts, overruns and any currency shortfall
For the incentive component, read our guide to borrowing against UK and overseas tax credits. The final financing decision should bring the tax calculation, lender terms and production cash needs together.
Does your plan fund the cash schedule?
A Capital Review can compare the proposed structure, highlight timing gaps and test downside scenarios. Scope, timing and a fixed fee are agreed before work begins. Arranging finance or raising investment is not included.
Discuss your production finance planGeneral information only. Both examples are fictional and do not represent a funding offer, market-standard advance or recommended investment structure. Contract, tax and security questions require advice on the particular production.