Profile

 

IFCIC is the reference credit institution in France for the financing of cultural industries. Established in 1983 on the French ministries of Culture and Economy’s initiative, IFCIC was entrusted with the mission of making it easier for companies active in the cultural and creative sectors to obtain bank financing.

IFCIC manages two sets of financial instruments : guarantees and loans.

IFCIC offers:

  • cultural and creative companies, its financing solutions and financial/banking expertise,
  • banks, its guarantee, co-financing ability and expertise in assessing the specific risk of cultural and creative companies and projects.

As of December 31st 2016, the total outstanding volume of loans guaranteed or granted by IFCIC amounted to €1BN, for the benefit of nearly 1000 cultural companies.

49% of IFCIC’s capital is held by the French state (mainly through Bpifrance) and 51% by private shareholders including, directly or indirectly, most of the main commercial banks and lending institutions established in France. As of December 31st 2016, IFCIC operated guarantee and loan funds representing a total aggregate amount of €160M, endowed by the French ministry of Culture, the CNC (Centre National du Cinéma et de l’Image Animée), the Caisse des Dépôts et Consignations and several other public and private sources.

History

For more than 40 years, the French ministry of Culture has lead actions contributing to the financing of cultural industries by endowing bank guarantee funds, notably for film production loans. IFCIC (Institute for the Financing of Cinema and the Cultural Industries) was created in 1983 to perpetuate and develop this policy.

IFCIC was entrusted by both the ministries of Culture and of Economy with a mission of public interest, that of contributing to the development of cultural and creative industries by making it easier for sector companies to obtain bank financing. Cultural and creative industries’ business models rely greatly on intangible assets, which hardly constitute sufficient securities for banks. Through time, the economic and legal environment in which those industries operate has become more complex. The IFCIC’s object consists in inciting banks to more readily accept the particular risks associated with granting loans to these industries.

IFCIC’s activity first grew in the field of film production. It expanded over time towards all cultural and creative sectors: cinema, TV, movie theaters, music, publishing, museums, galleries, bookshops, performing arts, press, visual arts, design, cinema technical industries, theater, entertainment, artistic crafts, fashion design, video games, photography, …

Guarantees constitute IFCIC’s historical instrument and the first solution envisaged to help finance a project. Since 2006, IFCIC has also developed the ability to grant loans to SMEs in the sector. According to its mission, the loans granted by IFCIC encourage the involvement of other banks and credit institutions in the borrower’s financial plan.

IFCIC’s action and expertise benefit from a strong network of institutional and professional partners : ministry of Culture and its institutions - CNC (Centre national du cinéma et de l’image animée), CNL (Centre national du livre) and CNV (Centre national des variétés, de la chanson et du jazz) -, Caisse des Dépôts et Consignation, ministry of Economy and Finance, ASTP (Association de soutien pour le théâtre privé), DEFI (Comité de développement et de promotion de l’habillement), association Au-delà du Cuir, Balenciaga, Chanel and Louis Vuitton (partners who have endowed the guarantee and loan funds operated by IFCIC as of December 31st 2016), Directions Régionales des Affaires Culturelles, FNCF, FICAM, UPFI, SNEP, CSDEM, SNJV, CPGA, SLF, ADELC, Fédération française du prêt-à-porter féminin, Fédération de la haute couture et de la mode, ELLE magazine, CODIFAB, UNIFA, Ateliers d’Art de France, ...

From 2010 to 2013, IFCIC managed the Media Production Guarantee Fund (MPGF), funded by the European Union’s MEDIA Programme. Since 2015, IFCIC has a delegation to process the applications addressed to Bpifrance which fall within the scope of the cultural and creative sectors. Since July 2017, IFCIC benefits from the support of the Cultural and Creative Sectors Guarantee Facility, with the financial backing of the European Union under the Creative Europe Programme.

Activity

IFCIC’s mission consists in making it easier for companies active in the cultural and creative sectors to obtain bank financing. It provides sector companies with two types of debt financing products: loan guarantees and loans.

Guarantee

According to IFCIC’s mission, guarantees are granted to encourage bank lending to companies (mainly SMEs) active in the cultural and creative sectors, in cases where their risk profile is handled with difficulty by standard credit institutions.

IFCIC guarantees take the form of a participation in risk in which IFCIC shares the final capital risk of the credit transaction with the bank.
The loans may cover various needs at all stages of the borrower’s development including:

  • working capital loans to finance day-to-day business, investment or growth,
  • interim loans or production finance loans for specific projects.

All maturities (from short to long term) are eligible.

The guarantee rate usually varies between 50% and 70% of the amount of the credit.

The lending bank, which is the sole beneficiary of the guarantee, submits the request for guarantee to IFCIC.

All credit institutions registered in the EU and active in the cultural and creative industries are eligible for IFCIC guarantees.

Since july 2017, IFCIC’s guarantees for European film & TV production benefits from the support of the Cultural and Creative Sectors Guarantee Facility, with the financial backing of the European Union under the Creative Europe Programme.

In 2016, IFCIC has guaranteed a total aggregate amount of €595M in new credits.

Loans

IFCIC loans to cultural and creative companies are used when a project calls for reinforced support. With a view to achieving leverage on financial banking, they are generally implemented alongside the guarantee instrument.

The loans usually finance cultural and creative companies’ development investments (post-seed financing) and mainly expenditures on intangible investments.
IFCIC loans are unsecured (no guarantee, security, mortage or insurance required).

By the conventions binding IFCIC to its financial backers for loan funds, IFCIC loans are restricted to French counterparts.

In 2016, IFCIC has granted an aggregate amount of €12M in new loans.

IFCIC’s loans benefit from the support of the Cultural and Creative Sectors Guarantee Facility with the financial backing of the European Union under the Creative Europe Programme.

 


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