Hard facts The new Belgian tax-incentive is an exciting opportunity for producers to complement or increase their budget. If used in an appropriate and honorable way, everyone involved benefits. However, producers should not expect the goose with the golden eggs. The tax incentive allows a 50% budget participation from Belgian investors. This does not equal 50% of cash available for your budget. Far from it. First of all the investors’ share is split into equity (real cash - 60% of the invested sum) and a loan (40% of the invested sum). The loan is expected to be repaid by the producer to the investor, most likely from pre-sales, or other income derived from the film. Therefore one cannot allocate the loan share as a true investment, but merely as a cash flow element, and as such it is very valuable. The investor will want securities that his/her loan will indeed be repaid plus a small upside. Why would he otherwise invest? If his risk is too big, it would financially just be wiser to pay taxes. Peloton Pictures wants to structure the financing in a way that investors are positively interested to give their money because their risk is minimal and their profit potential realistic. Besides the repayment of the investors’ loan plus interest, producers also have to realize that the intermediary function of the bank and the involvement of Peloton Pictures need to be compensated. It is very dangerous to quote a definitive value of the Belgian tax incentive. There are many ways of structuring. Smaller budgeted pictures increase their opportunities with a higher amount of equity financing. Bigger budgeted films benefit more from legitimate pre-sales. Also in many cases it might be better not to have the Belgian investors’ participation represent 50% of the budget but for them to take a smaller share. This also decreases the Belgian spend obligation which is 150% of the investors’ equity share. If a producer wants to get the full amount from the Belgian tax investors, the true bottom line is that a producer needs at least 55-60% of his production budget in available equity from other sources, and additional to that 25-30% in legitimate pre-sales which can be allocated solely to the Belgian investors. If the producer cannot provide that he/she will most likely not be able to benefit from the Belgian tax incentive, anyway not via the assistance of Peloton Pictures. Again please note that for some films the equity share could be higher and the pre-sales lower, and everything changes when the producer doesn’t go for the maximum. Peloton Pictures will endeavor to get the best deal for everyone. We want to help. But we can only help once the producer has created a solid groundwork of his own financing and sales.