CANNES — Barclays Bank has joined forces with the publicly quoted British financing group Baltic Media in a new initiative to provide 100% loan and gap funding for low-budget movie projects.
The partnership will enable Barclays for the first time to bankroll films whose budgets are not fully covered by pre-sales, with Baltic putting up a guarantee to cover the shortfall.
The concept is to offer producers a one-stop shop for banking services. As a major British clearing bank, Barclays has the capability to run the production accounts and manage the foreign exchange transactions, as well as provide the project loans.
The initiative is being launched by Barclays’ Soho Square branch, where the majority of U.K. production companies have their corporate accounts. Previously, the branch was not much involved in production finance, because it was only willing to provide loans against films that were 100% covered by pre-sales only.
Under the new deal, Barclays will now consider projects that are 70% pre-sold, with Baltic willing to cover the 30% gap against unsold territories. Baltic has 12 months after the film is completed before Barclays will call in its guarantee.
Typically, the partners are looking for pics costing around $6 million. Baltic is prepared to cover gaps totaling around $8 million at any one time, which means that the partnership has the capacity to support approximately six films simultaneously.
Although Barclays’ location in London means that most projects are likely to be from British producers, it is currently discussing possible projects in the U.S., Australia and Canada.
The initiative is being led by Jeff Salmon at Barclays and Michael Goddard at the parent Baltic group. The Baltic Media subsidiary has hired producer Jim Reeve as managing director and veteran film accountant John Chambers as deputy chairman.