2 min read
Why production companies carry structural cash-flow risk
A video production company commits to costs — crew day rates, camera and grip hire, studio bookings, catering, travel — before a single frame is edited and long before the client pays. Broadcast and corporate clients routinely pay on 30–60 day terms from invoice, which itself arrives after delivery and client sign-off. The result is a company that can be both profitable on paper and short of cash on the day payroll runs.
Finance structures suited to production
Invoice discounting lets you draw against the value of a raised invoice immediately upon issue, rather than waiting 45 or 60 days for the client to pay. This is particularly useful for corporate video clients — large limited companies or public bodies — whose creditworthiness is well established.
A revolving credit facility works differently: you have a ceiling you can draw against at any point and repay as client payments arrive. This suits companies running several shoots concurrently, where the timing of income is lumpy rather than predictable. Equipment purchase loans or hire-purchase arrangements address capital expenditure on cameras, lighting rigs or editing workstations separately from working capital.
Equipment finance and production asset ownership
Many production companies start on hired kit and move to owned equipment as volume justifies it. An asset finance facility — hire purchase or a lease — spreads the cost of cameras, lenses, grip and post-production hardware over the useful life of the asset, preserving working capital for day-to-day costs. The asset itself typically serves as security, so the application process differs from unsecured lending.
Confirm tax treatment with your accountant; the capital allowance position on owned versus leased production equipment differs and affects the true cost of each route.
Pre-production funding and deposit obligations
Locations, studios and specialist equipment suppliers commonly require deposits weeks in advance. A working capital line means you are not asking clients to pay deposits upfront — which can be a competitive differentiator — while still meeting your own supplier obligations on time. Some larger production companies negotiate staged payment terms with clients to reduce the funding gap; both approaches can coexist.
What lenders examine in production company applications
Lenders will look at filed accounts, management accounts and the aged debtor list. Production companies with a small number of very large commissions per year attract more scrutiny than those with a spread of corporate clients. Evidence of repeat business, signed heads of agreement or commissioning letters, and director experience in the sector all contribute to the assessment. Credicorp lends to limited companies and LLPs registered in the UK.
Frequently asked questions
Can production companies use finance to cover freelance crew costs?
Yes. Working capital facilities can fund operating costs including contracted freelancers. If those freelancers are paid via limited company invoices, they may also appear on your creditor schedule, which lenders will review.
Does broadcast commission differ from corporate video for lending purposes?
The debtor quality matters. A large broadcaster or blue-chip corporate client on your debtor book is assessed more favourably than a smaller or newer client. The concentration of any single client is also a factor.
Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.