There are two factors that triggered this opportunity and after a lot of due diligence I can say with confidence that this is a great deal. Here is how it works....
1. The US banks are in dire need of secured term deposits that can be held and lent over 1 year terms. As people are pulling out of the banks, the banks have decided to allow private "custodial" funds to be inside the bank allowing them obtain a 4:1 leverage position on every dollar deposited.
2. Tax credits and soft moneys are reaching new highs with some places offering 40% of the entire budget as a rebate on investment. This of course makes it competitive for the producer looking for the best deal on crew and services.
3. The deposit with the banks is insured!
Now...with these 3 things in place here is my scenario for investors.
Term 2 years
tax credit for purpose of this model 25%
Investor gets principle back
100% ROI over 2 years and....
upside of the film
If the ROI is reinvested it even becomes more incredible. The hard part is finding the groups to hobble together the equity term deposit, as these deals start at around 10MUSD.
If anyone out there wants more information on this I would be happy to show you the deal sheet we have created.