How a studio reaches the decision
At a studio or streamer, the project goes to a greenlight committee or the executives who control the slate. They look at a package: the script, the director, attached cast, a budget and schedule, and a P&L that estimates revenue across windows and territories. The greenlight process post covers the studio version in detail, and television greenlighting works differently again, with pilots and series orders.
What an indie greenlight checklist looks like
For THE LONG DRIVE, a $2,000,000 feature, the producer can't start spending prep money until each line below is done. The figures come from the film's finance plan.
| Condition | Status needed | Amount |
|---|---|---|
| Equity | Funds in escrow, released at close | $700,000 |
| Pre-sale contracts | Signed, bank loan approved against them | $450,000 |
| Tax credit loan | Term sheet signed, credit eligibility confirmed | $350,000 |
| Gap loan | Signed, sales estimates approved by lender | $300,000 |
| Deferments | Signed deal memos | $200,000 |
| Completion bond | Guarantor approved budget and schedule | n/a |
| Chain of title | Clean, reviewed by lender's counsel | n/a |
Add the rows: $700,000 + $450,000 + $350,000 + $300,000 + $200,000 = $2,000,000. If one line falls short, say the gap lender only commits $200,000, the film is $100,000 short and the budget has to be cut or more equity found before anyone says go.
Where people get confused
Filmmakers often announce a greenlight when a single investor says yes. That's a commitment for part of the money, and it can still fall apart if the other sources don't close. Banks and the completion guarantor treat the film as greenlit on the date financing closes, whatever was announced earlier.
Another confusion is timing prep spend. Casting directors, location scouts, and a production designer may start before the greenlight, but their fees are paid by the producer at risk. Keep that "soft prep" spend small and track it separately so it can be reimbursed from the budget at close.
What the greenlight unlocks
After the greenlight, the budget is locked, the start date for pre-production is set, and the line producer begins hiring department heads. The bond, the collection account setup, and cash flow schedules all follow from the close. For how the money pieces come together before that point, see film financing and the P&L projection.