Film glossary

Gap Financing

Gap financing is a loan made against the estimated value of territories or rights a film has not yet sold.

Gap financing fills the space between the money a production has already secured and the full budget. The lender relies on sales projections rather than signed contracts, which makes it riskier than a loan against a pre-sale or an approved tax credit.

Because of that risk, gap loans are usually capped at a limited share of the budget and priced accordingly. Producers treat gap financing as one line in a diversified finance plan rather than a source to lean on heavily.

Go deeper

Film Financing guideFilm financing is the work of assembling the money to make a film from several sources at once. Most budgets combine equity, debt and gap loans, pre-sales, tax incentives, and soft money into a capital stack, organized around a written finance plan and a clean data room that a financier can review quickly.

Related terms

Keep reading the glossary

Pre-SalesA pre-sale is a contract in which a distributor agrees to pay for the right to release a film in a territory, often before the film is finished.Mezzanine FinancingMezzanine financing is capital that sits between senior debt and equity in the recoupment waterfall, carrying more risk than senior debt and a higher cost.Hard MoneyHard money is film capital that must be repaid on commercial terms, such as equity and interest-bearing debt.Recoupment WaterfallThe recoupment waterfall is the agreed order in which each source of capital is paid back from the revenue a film generates.

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This definition is educational and does not provide financial, legal, or tax advice. Consult your own licensed advisors before acting. FILM.FUND is a software and workflow platform, not a broker-dealer. It never handles money, never holds securities, never takes a percentage of any raise or sale, and never predicts returns.