Getting Started with BondIt Media Capital
What Is BondIt Media Capital?
BondIt is a senior secured media lender which provides credit financing to film, television and new media projects. BondIt provides loans, or an “advance”, which is secured by defined and unencumbered collateral, such as pre-sales agreements (i.e. Minimum Guarantees), tax credits and tax rebates, negative pick ups, etc.). BondIt also provides bridge loans, corporate loans and cash flow solutions to media projects, producers and companies alike.
Is BondIt a completion bond company / a completion guarantor?
No, BondIt is a senior secured media lender whose name derives from the lending on SAG, DGA and IATSE payroll deposits (often referred to as “bonds”).
What kind of producer, project, creative team or company is BondIt able to assist?
BondIt is able to work with filmmakers across the spectrum of experience and pedigree; our company was built on assisting and providing value to early stage filmmakers with the same dedication that we provide our world-class clients. If your project financing opportunity has a significant element of unencumbered collateral (i.e. An asset without any lien or “charge”), BondIt would be pleased to consider financing your project.
How does BondIt decide which projects to get involved with?
First and foremost, BondIt always prefers to partner with great producers and creative teams who have done the early leg work on their project (which might include talent, equity investors, executive producer attachments, or other compelling elements which prove to us you are serious about making your project). The second most important criterion is whether or not a senior lending opportunity actually exists at this time, or if the project is more speculative in nature. As a senior lender, BondIt is almost always the “last dollar” into a project finance plan. In other words, BondIt is able to lend when the pieces of production are in place (or are being put in place with another institutional, as with a bridge loan opportunity). BondIt does not invest equity into projects.
At what stage can I bring a project / opportunity to BondIt?
BondIt is able to begin reviewing projects in the early development phase to assist with structuring and guidance of the finance plan. However, BondIt is only able to provide capital for projects that are in pre-production, production, post-production or completed which in all cases have sufficient unencumbered collateral available.
Are there specific sales companies, distributors, jurisdictions (states, countries, regions) that BondIt is unable to work with?
There are not necessarily pre-approved (or auto-denied) loan applications on the basis of the Payors (e.g. sales and distribution companies, tax credit offices etc.). However, BondIt’s appetite to invest in your project may be influenced by our view of the Payors creditworthiness today, jurisdiction, or even specific elements of the underlying contract. We are always happy to help guide your project toward our many first class partners (whether distributors, vendors, sales agents, executive producers etc.) which earn our stamp of approval after withstanding the test of time and experience.
What are the next steps in getting started with BondIt?
BondIt welcomes project submissions 24/7. Applications submitted electronically through our website at www.BondIt.us, or via email at info@BondIt.us.
Working with BondIt Media Capital
Does BondIt provide equity financing?
No. BondIt is exclusively focused on senior secured financing opportunities which are collateralized against firm collateral, such as pre-sales/receivables contracts, tax credits, minimum guarantees, negative pick-ups, and bridge loans.
Does BondIt provide gap financing (i.e. a mezzanine loan against unsold sales territories)?
BondIt is highly selective in offering gap/mezzanine loans to projects, but we do consider them on a project by project basis, and welcome all submissions.
How does the BondIt's union deposit financing work for SAG, DGA, IATSE and other guilds? And what is 'union deposit financing'?
BondIt provides the only entertainment industry cash flow solution for union deposits including SAG-AFTRA, DGA, IATSE and more. Each respective guild requires that the production pays a ‘performance deposit’, which is held by the Union(s) until production has been completed and all financial obligations to the union members have been satisfied. It is common for the deposits to take over 6 months to be returned, which creates significant cash flow issues for the production. BondIt can advance the deposit amount(s) back to production at a discount, thereby freeing up the cash flow, enabling a more streamlined production process, and providing the critically important certainty of funds for a successful production.
The process for working with BondIt on union deposit financing is as follows:
- Production applies for BondIt union deposit financing (25 question questionnaire)
- BondIt approves account within 24-48 hours (pending all relevant conditions are in place)
- Production pays the full union deposit amount to the respective guild(s)
- BondIt then reimburses the production LESS the BondIt fee (typically 12% – 15% of the total deposit amount), typically within 24-48 hours
- BondIt then works in tandem with the production to oversee that payroll obligations are met and the guild deposit is not impacted
- Once all guild requirements are completed and the guild(s) are prepared to release the funds back to the production, the deposit(s) are irrevocably directed to BondIt to repay the initial advance plus interest and fees.
Does BondIt provide “pay or play / offer money”?
No. BondIt is almost always the last money into a finance plan (primary exception being Bridge Loans) and does not make speculative loans to court talent.
Does BondIt provide bridge loans against equity investors on projects?
No. BondIt only provides bridge loans against the “permanent” finance plan closing, whereby the “take out” is an institutional investor such as a bank, well known financial institution (e.g. hedge fund, private equity group, family office) which will “hold” the underlying loan through maturity (typically 18 months). To be eligible for a bridge loan, the financing institution will have had to issue you a fully executed LOI or term sheet to finance your project. BondIt does not finance speculative take-outs or re-financings.
Does BondIt need outside investors?
No. BondIt has permanent capital invested from management and our co-owners at Accord Financial. BondIt also has a fully committed revolving credit facility from a large institutional fund.
I'm overseas and my company is not in the United States or Canada. Can BondIt offer my production company a loan?
Maybe. BondIt will review all submissions from around the world and will tell you quickly whether or not your jurisdiction is eligible for a loan at this time. The United Kingdom is a common exception for BondIt.
Does BondIt require a Completion Bond to provide a loan?
No. BondIt is able to provide loan financing to projects which cannot or will not get a completion bond. BondIt will assess the various risks of the specific projects and in most cases, will potentially require a personal guarantee and corporate guarantee from the producers and an additional non-shell company (i.e. A different company that is not the borrower).
What is the minimum and maximum size of a deal BondIt will consider?
BondIt considers loan sizes ranging from $50,000 to $25,000,000.
Who will be my point person at BondIt on my project?
BondIt has three full time partners who review all projects. If we finance your project, you will have a point person that is a decision maker in the business. We do not outsource anything and all decisions run through the management team. Typically, the team is divided into the following responsibilities:
- Matthew Helderman (CEO) manages business development, which includes the structuring and early negotiations of most new opportunities.
- Luke Taylor (COO) manages the underwriting, servicing, and legal operations. If you become a client, you will be introduced to Luke and will maintain regular communication with Luke through final repayment.
- Donald McGreal (CFO) works closely with Matthew and Luke in the financial structuring, servicing and reporting matters related to your account.
What is the timeline for getting started in working with BondIt?
Once BondIt receives all necessary and relevant information for the initial review process:
- Pricing model: 24 to 48 hour turn around time for BondIt to provide you with an initial indication of pricing/structure based on preliminary information available.
- Term Sheet: 24 to 48 hour turn around time for client to review.
Long Forms Agreements: 3 to 5 day turn around time in many cases. Larger, more complicated closings may take 3-4 weeks to close.
- Financial closing / funding: From start to finish, the process can range between 5 to 30 days, depending on the complexity of the transaction
How does BondIt move so fast?
BondIt has built end-to-end tech-enabled systems which support every step of your experience with BondIt while maintaining our personalized approach. Our committment to you is always to be value add with speed, responsiveness and accountability.
What is required to close a transaction with BondIt?
Requirements (or “Conditions Precedent”) vary due to the project specifics. Please refer to our website (www.BondIt.us) for an outline of typical requirements. A BondIt representative can provide a closing checklist upon request.
What are some of the recent projects BondIt has Executive Produced / financed?
Recent credits include the Oscar nominated Loving Vincent, the Arnold Schwarzenegger starring Aftermath from Lionsgate, the Netflix Original film To The Bone, starring Lily Collins, and the cult hit, The Invitation. Other world-class projects have been financed and will soon be released. For more details on additional projects, please visit www.BondIt.us.
Is BondIt able to participate with other lenders on the same deal?
Yes. BondIt is able to participate with other private equity financiers, private lenders, banks and institutions so long as the specific collateral granted to BondIt is sufficient and unencumbered (i.e. no other financier has been pledged that piece of collateral).
What if my project doesn’t have the senior secured collateral (pre-sales, tax credit / rebate, MG, negative pick up, receivable, bridge opportunity, etc.) required?
Please visit our sister company Buffalo 8 to review our B8 Services division options in regards to helping assemble the necessary elements (senior security components) required for a senior lender to consider funding.
Fees and Miscellaneous
How much interest and fees does BondIt typically charge?
BondIt typically charges between 12% – 25% per year based on the size, duration and security/risk parameters of your specific project. Pricing guidance is a loose estimation and can vary greatly depending on project specifics.
What are the set up fees required for a BondIt loan?
BondIt typically charges an additional 2% – 10% (depending on size) of the total loan as a set up fee to structure, underwrite, close and manage the transaction through maturity. BondIt typically reduces the loan proceeds by this fee (in other words, we provide you the capital to pay it).
What are the legal fees and deposit requirement for a BondIt loan?
BondIt must charge for the legal fees incurred in connection with underwriting and documenting of each loan. For smaller deals, the fee is typically between $2,500 and $5,000. For larger transactions, the fee can be considerably higher and based on the specifics of the transaction. We hire only expert but efficient attorneys so that every dollar not necessary can be “put on screen”. At the signing of a term sheet, BondIt typically requires an upfront, non-refundable legal deposit to commence work. The amount required will be specific to the transaction and will be communicated to you as early as possible.
What security does BondIt take when making a loan?
BondIt requires a first priority, perfected security interest in at least one element of collateral (i.e. unencumbered pre-sales/receivables contracts, tax credits, minimum guarantees, negative pick-ups, etc. In all most cases without a completion bond, BondIt will also require both a personal and an additional corporate guarantee.