The UK film industry would be in great shape - if only it was based in the US. That was the somewhat daunting message for delegates at the UK's first Production Finance Market, which kicked off today, organised by Film London in partnership with the Times BFI London Film Festival.

The strength of US financing in comparison to the UK's financial woes was a key theme, and even the keynote address was given by US veteran Mark Gill.

'There's an enormous cash culture in London,' Gill said, speaking of the growing success of The City. 'But it's not going to funding movies.'

'From our perspective, the biggest problem [in the UK] is the exchange rate,' continued Gill, veteran of Miramax and Warner Independent Pictures who recently raised $200m for production start-up The Film Department. Gill recalled working on international budgets when the pound was at $1.65, not current levels which can hit $2.05.

'Any benefit from changes of laws or tax incentives has been negated entirely if not overwhelmingly by the change in currency rates,' he said. Plus, he reiterated that the US has increasingly attractive state benefits on top of that weak dollar.

Gill wasn't down on British talent, however. He noted that The Film Department hoped to produce four to six films per year, and struggled finding strong enough US projects to fill those six. 'That's partly why I'm here [in London],' he said. 'There are a tremendous number of good filmmakers and good writers [in the UK] who aren't working at full capacity. In the US, it's beastly hard to find a good script, and the material is remarkably better here, it's two to three times as easy to find good material.'

Gill told that the solution for the UK business was 'to drag people like me here. The US has money but a shortage of stories. And here there is material and talent without financing. It's a marriage made in heaven.'

During a financing panel, Aramid Capital Partners head Simon Fawcett said his company was also looking in the US, as well as the UK, for its mini-slate deals with sales companies and top producers. Aramid recently signed a four- or five- picture deal with QED.

He agreed that business was tough in the UK. 'It's extremely difficult to finance a UK film without the cooperation of one of the UK broadcasters, and also maybe the UK Film Council,' he said. 'UK producers need to be thinking internationally and to move where the soft money is. At the moment, that's America.'

US financier Patrick Russo of The Salter Group echoed those sentiments. 'To build a platform to distribute global films, you need to have an orientation beyond current borders,' he said. Of course, the Catch 22 is that by going global, UK producers may not qualify easily for the new UK tax credit, which is dependent on a film's Britishness.

The producing panel offered proof that UK producers need to look at different business models to succeed, or even survive. The panellists all had different approaches to modified business plans instead of narrowly serving as stand-alone independent producers: Paul Webster has partnered with a TV company for Kudos Films; Robert Jones has aligned with a US major (New Line) and UK distributor (Entertainment) for Material; Mark Herbert at Warp works on multi-partner low-budget scheme Warp X and also on lucrative short films which outsell some features; and Marc Boothe of B3 diversifies his business developing projects for new media and TV (B3 has a first-look deal with Film 4 and is in talks with BET and HBO in the US).

Andrew Eaton, Michael Winterbottom's partner in Revolution Films, noted that film companies had to think beyond simply making features now. 'We'll all be content producers,' he said. 'It would be a mistake to just call us a film company.' Revolution, for instance, also has a TV arm.

Jones stated the painfully obvious for many in the audience: 'Film production on its own is not a moneymaking act, you've got to look sideways. You've got to bring in other revenue streams to support film production. We have to look at alliances and other strands of business that can bring in money on the side.'

The international PFM, which brought in a number of key US players as well as companies from across Europe, should be a way for UK producers to start looking for those alliances.

The PFM is expected to have about 250 attendees and more than 1,000 meetings during the two-day event.

Film London CEO Adrian Wootton said he planned for the Production Finance Market to become an annual event. 'We hope people will use this event as a real business opportunity,' he said.

Projects being pitched in private meetings at the PFM include Dominic Savage's $13m romance Mood Indigo starring Michelle Williams and Emily Watson (via Andrew Bendel of Blue Horizon Productions); Kristin Scott Thomas-starring comedy Sophie The Trophy (from Sarah Sulick of Curious Pictures); Ed Blum's $10m New York-set comedy The Laughter Clinic (through Film and Music Entertainment and Tin Pan Films); Jaume Balaguero's English-language horror Lady Number Thirteen (from Spain's Filmax); Neil Hunter and Tom Hunsinger's $4m comedy Three Way Split to star James McAvoy and Chiwetel Ejiofor (for Michael Rose at Magic Light Pictures); Nigel Cole's $6m UK/German comedy Oxbarn Social Club Outing (via Tarquin Gotch at Serious Entertainment); Meera Syal-starring My Indian Weddings(s) from Roderick Seligman at World Productions; and the Norma Heyman-produced biopic Lee Miller.

High-profile UK producers at the PFM with slates include Graham Broadbent of Blueprint Pictures, Paul Webster of Kudos, James Spring of Ealing Studios, Luc Roeg of Independent Film Company, Andy Harries of Left Bank Films, and Peter Watson of Recorded Picture Company.