Completion Bond
From ForcaWiki, the simple encyclopedia
| In one sentence | A promise, backed by a specialized company, that a movie will get finished and delivered even if something goes badly wrong during filming. |
|---|---|
| Category | Film and Television |
| Related | Collateral, Costs, Chain of Title |
Imagine you pay a classmate in advance to build you a treehouse by a certain date. You are a little worried, though: what if they run out of wood, get sick, or just give up partway through, leaving you with half a treehouse and no way to get your money back? Now imagine a trusted adult promises you, in writing, that if your classmate cannot finish, the adult will personally step in, either by finishing the treehouse, hiring someone else to finish it, or giving your money back. That promise would make you feel a lot safer paying in advance.
A completion bond is exactly that kind of promise for a movie. It is issued by a specialized company, called a Completion Guarantor, and it promises the people who paid for the movie, the financiers and distributors, that the film will actually get finished and delivered as agreed, even if the director gets hurt, the Costs run over budget, or something else goes badly wrong partway through filming. If the production truly cannot finish the movie on its own, the completion guarantor has the right to step in, take control, and either finish the film itself or pay back the money that was invested.
The completion guarantor charges a fee for taking on this risk, typically somewhere between 2 and 5 percent of the combined Above the Line and Below the Line costs, depending on how risky the project looks.
Why financiers insist on one
Banks and financiers often will not lend money on an independent movie at all unless a completion bond is already in place. It is one more layer of protection, alongside a clean Chain of Title and the right Collateral, that convinces the people paying for a film that their money is safe even if things go wrong on set.
Fun facts
- Because a completion bond company can genuinely take over a struggling production, directors and producers work hard to avoid ever triggering one, since it usually means losing creative control of their own movie.
- A completion bond does not guarantee the movie will be good, only that it will actually get finished and delivered as promised.
- Some of the riskiest parts of a shoot, like dangerous stunts or filming in a remote location, get extra attention from completion bond companies before they agree to back a movie.