Finance Plan
DOES YOUR FINANCE PLAN LOOK LIKE THIS?
This is the “output page” you deliver to your investors. There are complex spreadsheets that are behind each of these finance plans; cells affect one another and no number is arbitrarily used.
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The sample shown above is the “output” from our Standard Finance Plan. As your project begins to take shape, you’ll need current Discounting Estimates for your Pre-sale, Gap, and Mezzanine Loans, as well as a “Waterfall” Recoupment Schedule, both of which are found in the Granular Finance Plan.
The Basic Finance Plan is appropriate between 1m and 5m, for Single Investor, all Equity financing; if you have multiple investors, or are utilizing crowd-funding, then a “Waterfall” Recoupment Schedule is necessary.
Budgets below 1m are usually financed by Friends & Family and generally don’t require Finance Plans; that said, many sophisticated producers and financiers participate in projects under 1m and do require Standard Finance Plans.
Following is an overview of what comprises the Basic, Standard, and Granular Finance Plans:
BASIC – (for budgets between 1m-5m)
Calculates the Actual Cash Budget by solving for the Equity, Net Tax Credit advance, and Shortfall, if any.
STANDARD – (for budgets between 5m-10m)
(Shown above) Calculates the Actual Cash Budget amount, Production Budget amount and Capitalized Budget amount by solving for the Principal Value (i.e. net-net cash to production) of Tax Credit Advance, Gap Loan, and Pre-sale Loan (Net of Cash Deposits and Credit Discounting), as well as Equity amount required for acceptable Gap coverage ratio.
GRANULAR – (for budgets 10m+)
Includes everything in the STANDARD finance plan, as well as itemized Credit Discounting of contracted Pre-sales, unsold Gap estimates and a detailed Recoupment Waterfall that includes Deferrals, Performance Bonuses, Gross Talent Participations, Residuals, Costs of Sales, Loan Recoupments and Equity Participations.
