Soft Money
Film financing from tax incentives, grants, and subsidies that reduces the amount of private investment needed.
Definition
Soft money refers to film financing that doesn't require full repayment—primarily tax incentives, regional grants, and government subsidies. Unlike equity investments or loans, this money reduces the total capital needed from investors and improves project economics.
Many film budgets are structured around capturing available soft money, with shooting locations often chosen based on incentive programs.
Why It Matters
Soft money can represent 20-40% of a film's budget, dramatically improving investor returns. Understanding available incentives is crucial for production planning and budgeting.
However, soft money often comes with strings—local hiring requirements, location mandates, or qualifying criteria.
Examples in Practice
A production shoots in Georgia to capture the state's 20-30% tax credit, reducing their $20M budget's actual capital requirement to $14M.
A Canadian co-production qualifies for federal and provincial incentives by meeting minimum Canadian crew and content requirements.
A documentary secures grant funding from cultural foundations, reducing the private investment needed to complete the project.