IFCIC, a specialised lending institution, was charged by both the Ministry of Culture and Communication and the Ministry of Finance with contributing to the development of the culture industry in France by making it easier for sector companies to obtain bank financing. IFCIC, a neutral and independent institution, is a private-sector limited company entrusted with a service of general interest. Its capital is owned by French banks, large public financial institutions (Caisse des Dépôts and OSEO), and French State.
IFCIC's familiarity with the industry and relations with expert committees as well as professional networks enable it to conduct in-depth analyses of the risk incurred by companies that seek financing.
The loans guaranteed by IFCIC cover most of the needs of companies, at all stages of their development.
The banks that work with IFCIC are given not only financial guarantees in the event that companies should fail, but also risk analyses that are specific to the cultural industries, in particular where short-term loans for film and audiovisual projects are concerned.
IFCIC helps entrepreneurial companies get financial backing for projects from their banks. It also offers its own financial expertise.
IFCIC typically guarantees 50% of the loans obtained. This means that when a company fails, the bank's losses are cut by half.
Legal structure and financial resources
Institut pour le Financement du Cinéma et des Industries Culturelles is a limited private company and recognised lending institution
Founded in 1983 at the initiative of the Ministry of Culture, IFCIC is a neutral and independent institution: neutral, because its capital is open to most lending banks, and independent because it is financially responsible for all of its decisions.
Its main shareholders from the public sector are the state, Oseo and Caisse des Dépôts et Consignations, which together own 49% of the capital. The balance is held by some 20 commercial banks and lending institutions, notably Natixis. Most of the large retail banks and main lending institutions own shares directly or indirectly, through their parent companies or cooperative banks.
IFCIC has equity of about € 18 million and, more importantly, two active guarantee funds with a total gross value exceeding € 75 million : the Fonds de garantie Cinéma et Audiovisuel, which is funded by the Centre National de la Cinématographie (CNC) and the Fonds Industries Culturelles, funded in large part by the Ministry of Culture.
These funds enable IFCIC to guarantee up to € 421 million (IFCIC share), corresponding to total loans of the order of € 901 million, and still have sufficient capacity to take on new risk. Risk ratios are regularly verified.
Thanks to the public funds granted to its Funds and based on the significant leverage it allows, IFCIC has become a preferred partner for companies in the cultural industries, at minimal cost both to the State and to the final beneficiaries of the guarantee.
Who is eligible for the IFCIC guarantee ?
Loan guarantees for production and distribution
IFCIC guarantees loans to film and audiovisual producers and/or distributors whose activities make them eligible for CNC backing, for the production or distribution of European works susceptible of attracting film investment or funding from the audiovisual production support fund. IFCIC guarantees close to two-thirds of the independent films produced each year.
Loan guarantees for companies in the cultural industries
When IFCIC was created, the scope of intervention was broadened from the core business of guaranteeing production loans to include all aspects of the culture industries. The goal was to provide extra support to small- and medium-sized companies operating in a sector deemed to offer a high profile of risk. This type of support is now more necessary than ever. This is why IFCIC recently overhauled the resources and management of its Fonds Industries Culturelles.
All companies registered in the EU and active in the culture industry are eligible for IFCIC guarantees. This includes the book industry (publishing, distribution and retailing), music (publishing, record and concert production), theatre (production, acquisition and fitting out of theatres), plastic arts and photography (galleries and studios), art-related businesses (production and sale), heritage (development and restoration), architecture (firms), multimedia (production, publishing and technical services), press (political and general information and specialised cultural publications), cinema operation and the technical industries (camera and sound).
Frequently asked questions
To whom is IFCIC guarantee given ?
The IFCIC guarantee is given to the bank that lends money to the company and not to the company itself. The guarantee makes it easier for the bank to take risks in a sector that is known to be "difficult" since its losses are halved if the borrowing company fails.
I have a project for the culture industry. Can IFCIC help me ?
IFCIC helps your company gain access to bank financing by offering a guarantee, typically covering 50% of the loan amount, to your bank. IFCIC can also act as a counselling intermediary, helping set up the funding application for the project. IFCIC itself does not grant loans or subsidies. Depending on your sector of activity, you may consult the websites of the Ministry of Culture (www.culturecommunication.gouv.fr) or the Centre National de la Cinématographie (www.cnc.fr) for this type of support.
Can IFCIC guarantee be in addition to existing guarantees?
No, IFCIC assumes a portion of the credit risk alongside the lending bank, and therefore benefits from all securities in proportion to its share of the risk. Nevertheless, IFCIC intervention notably precludes any mortgage of the company director's home.
How does IFCIC decide to guarantee loans ?
IFCIC examines the loan applications presented by banks and submits them to expert committees (for loans in the book, music or cinema operation sectors) and/or to financial committees (notably for film and audiovisual production and distribution). The final decision is taken by IFCIC general management.
Can I submit an application to IFCIC before my bank agrees to the loan ?
No, applications are only examined at the request of a bank. IFCIC's teams are nonetheless available to examine and advise you on your financing application prior to the request of the bank.
Is IFCIC's commission added to the cost of the loan ?
IFCIC's intervention reduces the risk borne by the bank. As the interest rates reflects, among other things, the estimated risk, and because the commission charged the bank by IFCIC cannot exceed 1% annually of the risk, IFCIC's guarantee adds little or nothing to the cost of credit.
How is the IFCIC guarantee obtained?
- 1. The borrower's bank submits a request for guarantee to the IFCIC.
- 2. IFCIC may ask to meet the borrower.
- 3. The request for guarantee is submitted to an IFCIC commitment committee.
- 4. Decisions are taken by IFCIC general management or its representative.
- 5. IFCIC notifies the bank of its decision.
- 6. The lending bank informs IFCIC that it is authorising the loan within three to six months and sends it a certified copy of the loan contract and, where appropriate, the amortisation schedule.
Primary scope of intervention
Type of guarantee
The IFCIC guarantee is a risk-sharing agreement with the bank and not a bank guarantee. The lending bank, and not the borrower, is the sole beneficiary. All securities allocated to loan reimbursement are considered to be jointly held and IFCIC's share is proportional to its share of the risk.
The contract that binds the bank and borrower must mention this risk-sharing (rather than joint and several liability).
Amount of guarantee
IFCIC generally guarantees between 50% and 70% of the amount of the loan.
Duration of the guarantee
The guarantee usually runs for the full duration of the loan.
IFCIC's commission amounts to 1% annually of the guaranteed authorised loan. This commission is paid by the bank. For certain loans amounting to less than € 150,000, the commission is paid upfront, one month after the loan contracts are established.
Main obligations of the lending bank
For the duration of the loan, the lending bank shall inform IFCIC of any anomalies relating to the use or amortisation of the loan, the value or availability of collateral securities, or the amortisation of the loan. Any modification or extension of loans must also be submitted to IFCIC.
Activation of the IFCIC guarantee and indemnification
The IFCIC guarantee is activated if the borrower is put into receivership or if the lending bank notifies the borrower that the loan is payable, by common consent with IFCIC.
Once the guarantee is activated, IFCIC begins accruing cash interest in favour of the lending bank. Once the bank and IFCIC agree that all useful options have been exhausted, IFCIC compensates the lending bank as a final loss.
Tel: 01 53 64 55 70
Loans for Film and Audiovisual Production and Distribution
Tel: 01 53 64 55 63