Fund fortified for U.S. indie fuel

5:00 AM PST 05/17/2007 by Stuart Kemp, AP

Future, Grand Army set $500 mil for super gap fix

CANNES -- U.S. indie producers hungry for funding received a boost Wednesday with the launch of a $500 million fund set up by U.K. and U.S. financier Future Films and Los Angeles- and New York-based finance house Grand Army Entertainment.

The duo is partnering with an unnamed super gap fund to provide up to 85% funding on U.S.-based productions of up to $15 million in total and in some cases of up to $20 million, the parties said.

The fund will access a mix of stateside tax incentives, the U.S. federal tax incentive under Section 181 of the Internal Revenue code, mezzanine funding and so-called super gap and equity, the partnership said.

The fund founders said they aim to support a substantial number of productions that pass a checklist, the most important item being that the film incurs 75% of its expenditure in the U.S. in order to fully benefit from the finance model.

Grand Army directors Warren Goz and Stewart McMichael have secured $500 million through an exclusive relationship with an unnamed major U.S. institution. The duo are offsetting a lending arrangement against U.S. state incentives offered by Future Films and up to 50% super gap loans.

The start-up partnership said it will be able to rapidly green-light independent productions by potentially financing and providing up to 85% or more of a film's budget.

Goz said in a statement: "We believe that this proposition will enhance one of Grand Army's primary objectives, which is to facilitate film and television production that is shot primarily in America."

Future Films U.S.A. CEO Simon Horsman said: "While certain criteria will need to be met, we will work very closely with producers, not just as financiers, in order to get their films made."

The partnership aims to bring new opportunities to many lower- to medium-budget independent pictures looking to secure finance in the U.S.
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