Funding jargon busting
We use a lot of words when we talk about funding, and some of them may be confusing when you’re starting out. See below for brief explanations for some of these terms:
(To) break even = (to) generate enough funds from a show to cover your costs (i.e. to start making profit)
Break-even Percentage = the percentage of your total capacity you need to sell in order to break even
Break-even Sales = the number of tickets you need to sell to break even
Cash flow = a record of the movement of money in and out of your company’s bank account
Deficit = the unfunded part of your budget (e.g. if your budget is £1000 and you have secured £500 of funding, your deficit is -£500)
Overage = the opposite of deficit; funding secured on top of what your budget requires (e.g. if your budget is £1000 and you have secured £1100 of funding, your overage is £100)
Funding bid = document outlining your plans for a production, submitted as part of a funding application. For advice on how to write one, click here
Funding body = a society or company which offers funding
Grant = funding that you do not need to return to the funder
Pro rata loan = loan funding in which the return sum depends on the financial outcome of your show (i.e. the return sum is equal to the initial funds you were given, plus a percentage of your profit, or minus a percentage of your loss, whichever applies).
Sometimes, funding offers are made in two parts: Upfront funding and GAL (Guarantee Against Loss):
Projected expenditure = the sum of money you budget to spend on your production
Actual expenditure = the sum of money you actually spend on your production (should be equal to or less than the projected expenditure)
Projected income = the sum of money you expect to gain from your production
Actual income = the sum of money you actually gain from your production (should be equal to or greater than the projected income)
Upfront funding = Funding which gets transferred to you immediately following a successful application
Guarantee Against Loss (sometimes known as Underwriting)
= (in the context of pro rata loans) this is a sum of money which does not get transferred to you, but which allows a larger percentage of your budget to be funded.
This means that if you make a loss, the funding body will cover more of the loss. In return, if you make a profit, you return more of that profit to the funding body.
= (in the context of grants) this is an extra sum of money which the funding body releases if you make a loss; you do not need to return anything to the funding body.
For a more detailed explanation including examples, see the pdf on the right.
You don't need to worry about any of this right now though, as everything will be explained to you in your interview!