Media Capital Flanders finances projects in the form of equity and senior/mezzanine debt backed against sold/unsold territories. The loan amounts are conservatively calculated on the sales estimates provided by reputable sales agents. A sales agent is responsible for selling film rights to distributors in various territories before or after the film is completed.

MCF can provide the following financing:

• Pre-sales contracts (senior debt): The total value of the sales contracts delivered by the sales agent can be discounted at MCF and used to produce the film. The value of each territory is determined by a sales agent who provides ‘bankable’ sales estimates, showing the highs, mids, and ‘take-prices’ for each territory. Once the film is delivered to the distributors, the loan and interest are paid back to MCF, the lender.

• Gap (mezzanine debt): The gap is the potential value of the unsold territories provided by a reputable sales agent. Once the film is delivered to the distributors, the loan and interest are paid back to MCF, the lender.

• Tax incentives: By producing in certain countries, film production incentives can be obtained by the government after the actual local spend has occurred. These incentives can be discounted and used as an extra source of finance for production.

• Equity: Equity is recouped from the film’s profit (back-end) after the debt portion (sales and gap), fees, and interest are fully recouped. A share in the recoupment waterfall is obtained, allowing the investor to generate premium returns on box-office films.