Most film financings involve a bank. The bank will cash flow certain agreements that the producer has with film distributors who agree to pay the producer for rights in the film, if and when the film is delivered to those distributors. This is known as discounting a distribution advance.
The risk to the financier is that the distributor may refuse to pay the advance, because the film is not delivered, or the film does not meet the contractual specifications set out in the distribution agreement. For example, if the distribution contract stipulates who the lead actors of the film are and the producer makes a film with two different lead actors then this would give the distributor a reason to refuse delivery and payment of the film. A distributor can also refuse delivery for various technical reasons and therefore it is essential that the guarantor agrees to guarantee to the financier the delivery of substantially what the distributor is agreeing to pay for. This will include the attachments (actors, directors) to the film and technical quality.
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