Which statement best describes debt financing?

Which statement best describes debt financing?

• A. Equity financing through sale of ownership in the project
• B. Financing solely through government grants
• C. Securing funding in the future, like a bank loaning you money to get production going, and foreign presales
• D. Revenue generated after release to repay the loan

Answer: (C)

Debt financing means raising money by borrowing now and agreeing to repay it later, usually with interest, often using future project revenues as the source for repayment. In film and TV, this typically looks like getting a loan to start production and using pre-sales or foreign presales to secure part of the future receipts that will cover the loan. This describes the essence of debt financing: funds are brought in through borrowing, not by giving up ownership, and repayment depends on future revenue streams. The other ideas involve either selling ownership (equity) or obtaining funds that don’t require repayment (grants), whereas the chosen description explicitly pairs the borrowing with future revenue-based repayment through those pre-sales.

Debt financing means raising money by borrowing now and agreeing to repay it later, usually with interest, often using future project revenues as the source for repayment. In film and TV, this typically looks like getting a loan to start production and using pre-sales or foreign presales to secure part of the future receipts that will cover the loan. This describes the essence of debt financing: funds are brought in through borrowing, not by giving up ownership, and repayment depends on future revenue streams. The other ideas involve either selling ownership (equity) or obtaining funds that don’t require repayment (grants), whereas the chosen description explicitly pairs the borrowing with future revenue-based repayment through those pre-sales.