Administrative Regulations
HessenInvestFilm

Investitionsbank Hessen (WIBank) grants loans for ventures and projects in Hessen’s film industry on behalf of and with the participation of the State of Hessen pursuant to the following Administrative Regulations. Co-financing by the State of Hessen through the WIBank is always contingent upon the participation of additional investors (e.g. producers, distributors, television companies) with a cultural and commercial interest in further marketing. There must be a fundamental possibility of the reimbursement of the invested funds and a share of profits.

1. Goal

The HessenInvestFilm programme is intended to enhance the quality of film and television productions, to sustain a multifaceted cultural landscape, and to further improve and strengthen the competitive conditions for film production in Hessen. The State of Hessen is a traditional film centre and important media centre.

The German film industry is in a difficult situation as a result of the limited size of its home market and the global competition. Furthermore, the film sector, including the commercial film industry, is a value- and image-forming cultural medium and an important supplier for other media sectors. This programme is intended to promote cultural and commercial film productions in order to secure employment and income in the film and media industry. In cooperation with media enterprises, the State of Hessen wishes to contribute to strengthening innovative forces in Hessen’s film and media industry through the granting of loans. Irrespective of the respective form of commitment, the State shall share in the economic risk and success on equal terms with other investors, whereby returns and profits from the State’s involvement shall be re-utilized for further investment in film.

2. Qualified Applicants

Qualified applicants are primarily small and medium-sized enterprises in the industrial economy according to the EU definition and members of the liberal professions (freie Berufe) with a main office or branch in Hessen. Enterprises outside Hessen are entitled to apply if they carry out a specific proportion of the project in Hessen.

The projects to be financed shall be clearly distinguishable from minor projects in terms of project volume and design.

3. Purpose

Financial support from the HessenInvestFilm shall be awarded predominantly in connection with the following projects or project phases:

1. television productions, e.g. TV movies, documentaries, high-quality animated films;
2. cinema feature films;
3. bridging loans for pledged, but not yet disbursed funds from other project participants.

4. Type and Level of Funding

The financial contribution shall take the form of loans that are subject to interest charges.

Loans are made available proportionally within the framework of the overall funding of a project and without separate provision of collateral. The upper limit for loans amounts to a maximum of 1 million euros, but, contingent upon the applicant’s own capital resources, the sum may not exceed 50% of the total project costs.

The use and repayment of the loan is exclusively tied to the project to be financed. The accruing interest for purposes a) and b) shall be 2%. This interest is payable by the applicant irrespective of the success of the project. The interest rate for purpose c) shall be 6%.

The cited interest rates can be adjusted in line with general market interest rates prior to the disbursement of the loan. After disbursement, the interest rate remains unchanged for the entire duration of the loan.

The disbursement for purposes a) and b) amounts to 97%, for purpose c) 100%.

The duration of the loan should be adjusted to the length of the project. As a rule, loans are repayable at final maturity; however, the partners are free to agree earlier repayment times. If repayment of the loan is not possible from project income after final maturity, the remaining debt can be deferred initially for seven years with the goal of repayment out of subsequent income. After that, the deferment period can be prolonged or the remaining debt can be waived after a further lack of income has been ascertained.

Interest of 2% shall be charged until the final maturity of loans for purposes a) and b). Following repayment of the loan, the creditor shall be entitled to a share of the profits, the level of which shall be oriented towards the ratio of individual financial contributions and is in principle limited to a period of ten years. After that, the entitlement to profits can be prolonged by mutual agreement or an agreement reached on a final payment to the creditor.

5. Application Procedure

Enquiries and applications shall be addressed to

WIBank Hessen
HessenInvestFilm
Strahlenbergerstr. 11
D-63067 Offenbach
Germany

The amount of application documentation reflects the concrete project at hand and should be agreed with the WIBank in each individual case. The minimum prerequisite is a project description (details of content, details of participants), a finance plan (project volume, details of funds not financed by this programme, financial partners), screenplay, time schedule and a marketing strategy, including advertising concept and a plausible outline (e.g. including benchmarks) of anticipated returns and profits.

Applications are submitted to the HessenInvestFilm Commission of the State of Hessen quarterly. The WIBank makes the final decision on the basis of the evaluation commission’s recommendation.

6. Additional Provisions

The film production’s verifiable regional effect in Hessen must be at least 100% of the WIBank’s financial contribution.

It is possible to combine the loan with film funding instruments of other States, the Federal Government and the European Union. The total share of funding from this programme and from public funds should as a rule not exceed 50% of total costs. In the case of difficult productions and those produced with limited means, the share of public funding can amount to up to 75%.

Financial contributions always represent additional investments; there is no legal right to the granting of a loan. The WIBank makes decisions on the financial contributions within the framework of the funds available.

Taking into consideration the envisaged funding instruments, the provisional administrative rules relating to Section 44 LHO (State Financial Regulations) shall apply in a limited form as follows:

The funds shall be paid out proportionally pursuant to the progress of the project. The use of the financial contribution shall be monitored by the WIBank. The WIBank shall be regularly notified of the progress of the project. Major changes compared with the details given in the application shall be communicated to the WIBank immediately. Any change of purpose requires the approval of the WIBank. A documentation of the project with numerical evidence shall be presented to the WIBank before the last tranche of funding is disbursed.

The WIBank is entitled to exercise any powers required to supervise the correct use of funds. It shall examine the commercial development on the basis of regular reports from the enterprise and has the right to inspect business accounts and to be represented in supervisory bodies. It can undertake audits or demand their performance by experts.

The Court of Auditors of the State of Hessen’s right of inspection remains intact.

If the purpose is not achieved, then the right to disbursement of additional funds shall lapse. The WIBank is entitled to give notice of termination or partial termination of granted loans.

A separate agreement shall be made concerning the repayment arrangements for terminated loans. If funds are used inappropriately, the repayment arrangements shall envisage the immediate calling-in and reclaim of the loan including an interest rate of 6% from the day of disbursement. If funds are used in accordance with the goals of the programme and the project is discontinued due to reasons beyond the control of the borrower, the WIBank can waive complete repayment after agreement has been reached with the Hessen Ministry of Higher Education, Research and the Arts (HMWK) and the Hessen Ministry of Finance (HMdF). A decision on the level of the repayment demand shall be made by the WIBank in consultation with the HMWK and the HMdF.

The Regulations entered into force on 15 June 2006.

In cases of doubt, the German-language version of the regulations shall be definitive.