# Soft Money

Source: https://storiara.com/glossary/soft-money
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> Soft money is the part of a film's financing that the producer doesn't have to repay out of the film's revenue, or repays on easy terms. It includes production tax credits and cash rebates, grants, public broadcaster and regional fund support, and some co-production subsidies. Hard money, by contrast, is equity and loans that expect repayment and a return.

## Why producers chase it first

Every dollar of soft money is a dollar the producer doesn't have to raise as equity or borrow as gap. Equity investors also like it: the less of the budget their money covers, the sooner they can recoup. That's why finance plans usually start by working out the incentives available at each candidate location, often with an [incentive calculator](https://storiara.com/tools/incentive-calculator), before approaching investors.

## Soft money on a $2,000,000 film

THE LONG DRIVE shoots in Georgia, which offers a 20 percent transferable credit plus a 10 percent uplift for including the Georgia promotional logo, on a minimum $500,000 spend (per the Georgia Department of Economic Development). The budget breaks down like this:

| Line | Amount |
|---|---|
| Total budget | $2,000,000 |
| Georgia qualified spend (assumed) | $1,400,000 |
| Credit at 30% (20% base + 10% logo uplift) | $420,000 |
| Credit sale value at an assumed $0.90 per dollar | $378,000 |
| Loan advanced against the credit during production | $350,000 |

The credit covers about 19 percent of the budget in cash terms ($378,000 / $2,000,000). The rest of the budget comes from [equity](https://storiara.com/glossary/equity-financing), [pre-sales](https://storiara.com/glossary/pre-sales), gap, and deferments. Qualified spend is lower than the budget because items like some above-the-line fees and out-of-state purchases usually don't qualify. See [qualified spend](https://storiara.com/glossary/qualified-spend).

Outside the US, the same idea shows up in different forms: a cash rebate like Hungary's 30 percent incentive, Australia's [producer offset](https://storiara.com/glossary/producer-offset), or combined national incentives on an official [co-production](https://storiara.com/glossary/co-production-treaty).

## Where soft money catches people out

Timing is the first catch. Most incentives pay after the production has spent the money and passed an audit or certification. The production needs cash during the shoot, so the credit has to be borrowed against, and the lender's fees and interest reduce its value.

Program rules shrink the number in other ways. Minimum spends, resident labor requirements, logo credits, cultural tests, and caps can each cut the amount. If the Georgia logo requirement isn't met, THE LONG DRIVE's credit drops from 30 to 20 percent, from $420,000 to $280,000, and the lender's $350,000 loan is no longer covered.

Double counting causes trouble when a film stacks sources. Some programs exclude costs that another public source already paid for, so read each program's rules before a grant and a credit touch the same line item. Your [production accountant](https://storiara.com/roles/production-accountant) should track which costs each source pays for. For the full range of programs, browse [incentives by location](https://storiara.com/incentives), and for grants see [film grants for independent filmmakers](https://storiara.com/blog/film-grants-for-independent-filmmakers).

## Frequently asked questions

### Is a tax credit really free money?

It isn't repaid from the film's revenue, but it has costs. The credit arrives after the spend is audited, so most productions borrow against it and pay interest and fees, and transferable credits usually sell for less than face value.

### Do grants count as soft money?

Yes. Nonrecoupable grants from arts councils, foundations, and film funds are soft money. Some public funds invest on recoupable terms, so read whether a given award must be paid back from receipts.

### Can soft money be combined from several places?

Often, within each program's rules. An official co-production can draw incentives in both countries, and a US film might combine a state credit with a foundation grant. Some programs cap total public support as a share of the budget, so check before stacking.

## Sources

- [Georgia Film Tax Credit, Georgia Department of Economic Development](https://www.georgia.org/industries/film-entertainment/georgia-film-tv-production/production-incentives)
- [Hungarian Film Incentive, National Film Institute Hungary](https://nfi.hu/en/filming-in-hungary/hungarian-film-incentive)