# Loan-out company

Source: https://storiara.com/glossary/loan-out-company
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> A loan-out company is a corporation or LLC, usually owned by the individual it represents, that employs that person and 'lends' their services to a production. The production pays the loan-out instead of the individual, so employer payroll taxes aren't withheld, but union pension and health contributions are generally still owed on union members.

## What changes in the budget

Take an actor earning $12,000 for two weeks on a union picture with a 22% pension and health contribution. Compare paying her as an employee with paying her loan-out:

| Line | As employee | Through loan-out |
|---|---|---|
| Fee | $12,000.00 | $12,000.00 |
| Employer FICA, 7.65% | $918.00 | $0.00 |
| State unemployment, workers' comp, payroll fee (example 4%) | $480.00 | $0.00 |
| Union P&H, 22% | $2,640.00 | $2,640.00 |
| **Cost to production** | **$16,038.00** | **$14,640.00** |

The difference is $16,038 - $14,640 = $1,398. The loan-out's owner pays her own payroll taxes out of the $12,000, so she's not getting a better deal; the tax cost moved to her company. Some payroll companies still process loan-out payments and charge a smaller handling fee, which belongs in the budget.

## Why people use them

Loan-outs are most common for actors, directors, writers, producers, and senior crew like DPs and editors. Owners use them for liability and tax planning reasons their accountants advise on. For productions they're neutral to slightly cheaper, but they add paperwork and some risk.

## The risks for production

A loan-out needs to be a real, active company. If the company isn't in good standing, or the individual is really working as a regular employee under production's control, a state agency or auditor can treat the person as the production's employee, and production can owe the taxes it didn't pay. To head that off, [payroll companies](https://storiara.com/glossary/payroll-company) and [production accountants](https://storiara.com/roles/production-accountant) ask for current documents before the first payment.

Workers' comp is another gap. If a loan-out owner is hurt on set, the production's comp policy may not cover them unless the loan-out carries its own coverage or the policy includes them, so get the loan-out's certificate of insurance or confirm coverage with your broker.

Some states also require production to withhold state tax on payments to out-of-state loan-outs for work done in that state. Ask the payroll company before paying a loan-out for work in a new state.

## Deal memo language

The [deal memo](https://storiara.com/glossary/deal-memo) should name the loan-out, its EIN, the individual f/s/o, and whether the rate is inclusive of everything or whether production pays union benefits on top. It should also include the inducement. A [crew deal memo template](https://storiara.com/templates/crew-deal-memo) has a loan-out block you can use.

## Frequently asked questions

### What does f/s/o mean on a contract?

It stands for 'for services of.' A deal written to 'Blue Door Productions LLC f/s/o Jane Smith' means the production contracts with Jane's loan-out company to get Jane's services.

### Do you pay payroll taxes on a loan-out?

The production doesn't withhold income tax or pay employer payroll taxes on the fee, because the loan-out is the employer and handles its own payroll. Union benefit contributions are still paid by the production on covered union work.

### What paperwork is needed to pay a loan-out?

Typically the company's formation documents or certificate of good standing, its federal EIN on a W-9, the loan-out agreement, and an inducement letter signed by the individual agreeing to be bound by the contract.