Spain’s mutual guarantee funding body Audiovisual SGR and France’s lending institute IFCIC are expected to split 50-50 the new European Commission (EC) film fund worth $10.5m (€8m), which guarantees bank loans to producers.
Audiovisual SGR confirmed that they had received news from the EC that they would be sharing responsibility for the new fund with Ifcic. The two state-backed organisations will each receive €4m over a four year period to cover a percentage of the loss in case of failure by the producer to reimburse the bank loan.
The Audiovisual SGR has accepted the terms and conditions laid out by the European Commission, but the final contracts are yet to be signed.
Once in place, the loan guarantee mechanism should prove invaluable in the current financial climate where accessing bank loans is proving very tough for film makers.
Full details of how the two bodies are to distribute the funds are yet to be revealed, but the Audiovisual SGR has indicated to Screen that they would guarantee up to 50% of loans which go bad.
A non-profit organisation set up in 2005 by the Ministry of Culture, Audiovisual SGR say they will likely take 0.75% of the amount that is loaned by the bank to each project to cover their management costs.
The SGR will also likely work with German based consultancy organisation Peaceful Fish (in particular their CEO Thiery Baujard) to manage the fund, and the European Investment Fund could potentially provide a counter guarantee system to back up the Spanish side of the fund, covering up to 55% of loan repayment failures.
So far their remit for the loan would cover the UK, Spain, Portugal, Ireland and Poland, with the possibility of working with more countries in the near future.
The $10.5m figure could potentially double if the scheme proves to be a success.