Brussels, 12 January 2011
European Commission launches € 8 million cinema loan guarantee fund
The European Commission has launched a loan guarantee fund aimed at making it easier for film producers to gain access to bank financing. The €8 million MEDIA Production Guarantee Fund will be run by the Commission in tandem with two operators with a long-standing expertise in this area, the French Institute for the Financing of Cinema and Cultural Industries (Institut pour le Financement du Cinéma et des Industries Culturelles, 'IFCIC') and Spain's Guarantee Society for the Audiovisual Sector (Sociedad de Garantia reciproca para el Sector Audiovisual, 'Audiovisual SGR'). The MEDIA Production Guarantee Fund will be available to support film producers throughout Europe. The Fund will, for example, help to cover a proportion of a loan in the event of non-payment by a producer due to bankruptcy.
Androulla Vassiliou, the European Commissioner responsible for education and culture, commented: "We know how difficult it can be for film producers to access bank loans, even if they have a very promising film project. The MEDIA Production Guarantee Fund will make it easier for financial institutions to make loans to film producers by guaranteeing that part of any agreed loan will be re-paid in the event of a default. The two organisations which have been selected by the Commission have both demonstrated their expertise in providing such guarantees in their domestic markets and will now add a European dimension to their operations."
How the Fund will work
The MEDIA Production Guarantee Fund will run until the end of 2013. IFCIC and its Spanish counterpart will receive a total of € 4 million each from the Fund. The Commission estimates that, thanks to the leveraging effect of the Fund, more than €100 million will be freed up for loans to film producers, many of whom are small or medium sized businesses.
In the event of a default, a bank would be able to recover up to 55% of its loan from IFCIC and up to 50% from Audiovisual SGR, with funding from their own resources and from the MEDIA Production Guarantee Fund.
The maximum funding available from the MEDIA Production Guarantee Fund is €8 million. Any money that is not used from the Fund will be returned to the EU budget.
Film producers are eligible for support from the Fund if they are established in any of the 32 countries which currently participate in the MEDIA programme: the 27 EU Member States, countries in the European Economic Area (Norway, Iceland, and Liechtenstein) as well as Switzerland and Croatia.
This Fund is a part of the MEDIA programme that contributes €755 million to support Europe's film industry from 2007-2013. The funding helps improve the distribution and promotion of European films and strengthen the competitiveness of the sector.
More information about the EU’s MEDIA programme: