A completion guaranty guarantees that a motion picture will be completed and delivered within budget, in accordance with the script and on schedule. It is a surety bond and provides that if the project runs into problems, the guarantor will either advance funds to finish the film; take over the project and complete it; or abandon the film and repay the financier the production financing advanced. The guaranty operates to protect the financier through production and post production of the motion picture.
The completion guarantee is an especially valuable aspect of the collateral package providing the financier with the necessary comfort that the motion picture will be completed and delivered or alternatively, that the financier will be repaid directly by the completion guarantor. The bond is the agreement between guarantor and financier.
The completion guarantor also enters into an agreement with the producer which outlines producer's obligations and rights of the guarantor to ensure completion and delivery of the film in accordance with the completion guaranty issued to the financier.
The guarantor is typically involved with every aspect of a film's production to minimize risk of overages or abandonment. The producer's agreement requires that the production furnish information about the film's progress so that the guarantor may monitor costs and schedule to ensure that the production is proceeding on target.