SBA program encourages filmmaking

|tab|

The U.S. Small Business Administration has announced the creation of new possibilities for funding independent films produced in the United States, an action that also establishes intellectual property as eligible collateral for SBA funding.|ret||ret||tab|

Aida Alvarez, administrator of the SBA, signed Dec. 14 a partnership agreement with Marcie Setlow, president of New York Women in Film & Television, at the group's luncheon in New York City, according to an SBA release.|ret||ret||tab|

Meanwhile, in Los Angeles, the identical agreement was signed by SBA District Director Alberto Alvarado with representatives of two organizations that promote the film industry. Selise E. Eiseman, program director, signed on behalf of Los Angeles Women in Film. Barry C. Collin, president of the Independent Feature Film Producers, also signed the agreement. |ret||ret||tab|

"These partnerships herald a new relationship between SBA and the film industry," Alvarez said in the release. "It will help small, independent filmmakers obtain much-needed assistance to fund projects that might otherwise be abandoned or taken out of the country to produce at lower costs. These are U.S. dollars lost in wages, goods and services that normally would have been purchased from small businesses." |ret||ret||tab|

According to a 1999 study by the Screen Actors Guild and Directors Guild of America, the loss to the American economy of producing these films in Canada and Australia was more than $10 billion in 1998. "The SBA looks forward to working with various state governments in helping to promote independent films and generate jobs in the U.S. related to the film industry," Alvarez said. |ret||ret||tab|

Since last spring, the SBA, particularly through its Los Angeles District Office, has been working to identify ways that the agency can assist independent filmmakers and the other small businesses that support them.|ret||ret||tab|

"There is a vast, untapped potential of creative energy and ideas that could be unleashed with the help of the SBA," Alvarez said. "And this is only the beginning of the kinds of creative projects and products that could be eligible for SBA backing." |ret||ret||tab|

The establishment of intellectual property as eligible collateral for SBA guaranteed loans also opens the door to funding for businesses involved in the creation of similar products or services to their clients, customers or audience, such as software, client databases and business-to-business services. |ret||ret||tab|

"This SBA-backed breakthrough financing will help many good ideas come to fruition that may have otherwise been lost," Alvarez said.|ret||ret||tab|

Loan project fact sheet|ret||ret||tab|

The project is designed to keep production of small, independent films at home, ending the exodus of U.S. film production to other countries for financial reasons. |ret||ret||tab|

In 1998 "runaway productions" cost the U.S. economy $10.3 billion in lost revenue and wages (Monitor Company, June 1999). These independent films for which financing was found were produced in Canada and Australia at an average savings of 25 percent below U.S. production costs. |ret||ret||tab|

The project establishes intellectual property as eligible collateral to secure SBA guaranteed loans. |ret||ret||tab|

Loans requested under this project will be funded according to the rules and provisions of the SBA's 7(a) guaranteed loan program. The agency's largest loan guarantee program last year provided 43,748 loan guaranties for a record $10.52 billion in small business start-up or expansion capital. |ret||ret||tab|

Films must meet community standards and cannot be of "prurient sexual nature" nor advocate any particular religious or political doctrine. |ret||ret||tab|

In the new economy, more and more small businesses are offering creative products or services to their clients, customers or an audience, such as software, client databases, business-to-business services, film and television productions. |ret||ret||tab|

In Los Angeles last spring, "The Gristle" became the first-ever independent film to be produced with partial funding from an SBA-guaranteed loan. Two other loans for West-Coast productions are in process. |ret||ret||tab|

[[In-content Ad]]