Comment on: UK Budget 2012: UK film industry welcomes TV tax relief, but wants update on EIS approvals
There is insufficient demand for producers to raise £10m, they will struggle to raise £5m. The large finance companies able to raise significant amounts were just accessing EIS relief with all / most of invested funds underwritten by contracted revenues. But these are likely to get knocked out by the new disqualifying test, which aims to exclude companies set up for the purpose of accessing relief.
The above is correct, "the lending of money or the bearing of the customer's financial risk" is an excluded activity. The general rule for a trade that receives royalties or licence fees (ie the way a film generates income) is that it is excluded unless the EIS company creates "the greater part of it in terms of value" of the intangible asset. Just lending or providing a guarantee would prima facie appear to breach EIS rules. It only really applies if the EIS company is the principal producer of the film. See http://www.hmrc.gov.uk/manuals/vcmmanual/vcm17000.htm