Who’s got the money and who’s getting it?

Those questions are likely to top the agenda at this year’s American Film Marketing Association gathering. An explosion in independent filmmaking, combined with the U.S. economic upturn, is good news for would-be auteurs seeking practical partners.

Producers say high visibility and solid box office receipts of indie fare such as “The Crying Game” ($ 60.72 million in the U.S.) and others have brightened the spotlight on this sector of the industry.

But it’s not just creative types who are diving back into the indie pool. Investors who remember all too well the disasters of the ’80s are also dipping a toe in, prompted by very low rates of return — 3% to 4% — on bank instruments such as certificates of deposit and money-market accounts .

Increasing demand for product as a result of the expansion of cable television outlets worldwide and tremendous hype about the so-called interactive future are also drawing backers with ready cash.

Experts hasten to point out, however, that the big banks have become a lot smarter about lending. While project money is certainly available, investors are parceling it out for individual contracts rather than throwing it willy-nilly at corporate deals.

“In the traditional forms we are not getting back in. It’s that simple,” says Tom LaMonica, vice president at Chase Manhattan Bank. Chase recently formed an advisory board of industry pros to help target areas for investment. “It’s been a very difficult industry to lend into but the interest in finding alternative techniques is definitely there.”

Companies such as Miramax, New Line, IRS and Polygram continue to represent a large chunk of the indie resource market in terms of pre-sale and existing sale negotiation.

These deals have become more crucial now that indies are competing increasingly against studio-financed movies of a nontraditional type such as “Howards End” or “Six Degrees ofSeparation.”

Pre-sale arrangements also provide a security blanket for major moneylenders, most of whom now consider financing only nearly or completely collateralized projects.

“There was a real retrenching that went on,” says Jeff Schechtman, chief exec of PFG Entertainment. “Banks realized that if you makes loans on properly collateralized individual business, then it is a good business. In the ’80s, they were lending blind without contracts and it came crashing down.”

While U.S. banks have grown more cautious about small film financing, foreign banks continue to play an active role in the $ 1 million to $ 10 million market, says Edward Powers, executive VP of European Film Finance Ltd., which represents more than a dozen European, Asian and Middle Eastern commercial institutions.

Contrary to popular perception, these banks are still extremely active lenders, inking some 35 to 40 deals worth $ 1 million to $ 5 million each year, says Powers. A minimum of 50% to 60% collateralization is required, as is a completion bond.

The conclusion? The industry’s problem is not a lack of funds but rather a dearth of borrowing experience among newly creative types.

“A lot of producers don’t qualify for finance because they don’t know how to go about it,” Powers maintains. “The downfall ofindie financing is how producers package. Every dollar they save in budget is a dollar they don’t need to finance ,” he adds.

Sophisticated private investors — not the star-struck dentist — here and abroad are also showing greater interest in backing indies. Several U.S. banks — including Chase Manhattan and Bank America — are reportedly contemplating private placements of pooled funds as a way to provide backing without the high exposure suffered by banks like Credit Lyonnais, which sank more than $ 1 billion into the MGM deal.

“Many individual investors are coming in from overseas because the return rate is pretty good,” says William Shields, CEO of G.E.L. Distribution and a former AFMA president. “The business part (of this industry) — devoid of glitz and glamour — is still a very good business.”

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