Lease financing in the context of feature film financing is a method used to fund the production of films through leasing arrangements. It primarily revolves around the financing of key assets, such as production equipment, sets, and other physical components essential to the filmmaking process.

Lease Agreement: A production company enters into an agreement with a leasing company (or lessor) to rent assets for a specified period rather than purchasing them outright.
Payment Terms: The production company (lessee) pays periodic lease payments during the lease term.
Ownership: The leasing company retains ownership of the leased assets, and the production company uses them for the duration of the project.

Cost Efficiency: Feature films require expensive equipment and infrastructure, such as cameras, lighting, and sound gear. Leasing spreads out the cost, reducing the need for large upfront capital investment.
Flexibility: Since film productions are often temporary, leasing allows companies to use high-quality equipment without long-term commitment.
Tax Benefits: Lease payments may be deductible as operating expenses, which can reduce the taxable income of the production company.

Specialized Equipment: Leases often involve highly specialized film production tools, which may not be useful to the company after the film’s completion.
Completion Bonds: Lenders or lessors may require a completion bond (a form of insurance) to ensure the film is finished, as their investment depends on the project’s success.
Residual Value: For assets with potential resale value (e.g., props, sets), the lessor may factor in the residual value when calculating lease terms.

Supplementary Financing: Lease financing is typically one part of a larger financing strategy. Other sources might include pre-sales, tax incentives, private equity, and debt financing.
Risk Management: Leasing limits the financial risk for producers, as they don’t need to own the equipment or infrastructure outright.

A production company may lease high-end cameras from a specialized vendor instead of purchasing them.
A set designer may lease scaffolding, lighting rigs, or other infrastructure that is only needed during the filming phase.

Creditworthiness: Production companies need good credit or collateral to secure lease financing.
Dependency on Film Completion: If the film is delayed or canceled, lease payments still need to be made, which can strain the production budget.

In summary, lease financing in film production helps manage costs, improve cash flow, and minimize financial risks by allowing producers to access essential resources without the burden of full ownership.