A loan is not only about buying an apartment or a car. In the world of game development, more and more indie developers are thinking about the possibility of attracting borrowed funds to implement their first or next game. This is a real chance to speed up the process, expand the team, improve the quality of the product. But along with the opportunity comes risk: debt can become a burden, especially if the project does not pay off. In this article, we will analyze when it is really worth taking a loan, what forms of financing are available to indie developers and how to correctly calculate the economics of the project in order to come out on top.

When to Consider Taking Out a Loan

The decision to borrow should not be spontaneous. There are a number of situations when a loan may be a logical and justified step:

• You already have a prototype and positive feedback from the audience;
• The team is staffed, but there are not enough resources to produce content;
• There is an understanding of the time frame, budget and potential profit;
• The launch on a platform (Steam, itch.io, etc.) is already planned, but a budget is needed for marketing and polishing.

A loan is a tool, not a lifeline. It should only be used when the project is moving forward and there are reasonable projections for its payback.

What types of loans are available to a developer?

Both classic and alternative forms of debt financing are available to indie developers. Let’s look at the key options:

1. Bank loan for small business development

• Interest rate: from 10 to 20% per annum.
• A business plan and registration of individual entrepreneur/LLC are required.
• A deposit or surety is often required.

2. Grant loan

• Some public or private grantors provide funding on a repayment basis only if the project is successful.
• Usually do not require percentages, but are tied to KPIs.

3. Microloans from entrepreneurship support funds

• Fast approval, minimal requirements.
• Often the intended purpose must be documented.

4. Private loans and P2P platforms

• Flexible terms, but high risk of becoming dependent on an unscrupulous lender.

5. Credit cards and overdrafts (for a small start)

• Not recommended as a primary source – high stakes.
• Can be used as a temporary reserve.

How to calculate breakeven point

Before you make any financial commitments, you need to have a clear understanding of how many copies of your game you need to sell to at least break even.

Break-even point formula:

Total Costs / (Price of Game – Variable Costs per Copy) = Required Sales

Example:

• Total expenses: 600,000 ₽ (including loan + interest)
• Price of a copy: 800 ₽
• Cost per sale (Steam commission, taxes, marketing): 300 ₽

600,000 / (800 – 300) = 1,200 sales

If you are not confident that you will sell at least 1,200 copies, borrowing becomes too risky.

What is it worth spending borrowed money on?

For investments to really work, it is important to spend them on key aspects, and not on “sweet” extra options.

Priority areas:

• Programmer/Game Designer Job (if not in the team)
• Artists and animators for finished assets
• Sound and music (an important emotional layer of the game)
• Marketing and PR: trailer, store page, advertising

Avoid spending on:

• Expensive offices and equipment (if you can work remotely)
• Personal needs
• Risks not directly related to the game (cryptocurrencies, investments)

How to apply for a loan correctly

The legal part is no less important than the creative one. Mistakes here can cost more than the failure of the project.

Adviсe:

• Be sure to formalize the loan in writing (agreement, payment schedule).
• If this is a private loan, get a lawyer involved.
• Consider possible delays: calculate the worst-case scenario.
• Include all loan expenses in your financial plan to avoid cash flow gaps.

Also, don’t forget about tax obligations: interest on the loan is taken into account in tax reporting, especially when registering a legal entity.

How to Assess Risks and Prepare a “Plan B”

Borrowing is always a risk. Even a great idea can fail due to marketing or poor release timing.

Before signing a contract, ask yourself:

• What will I do if the project doesn’t pay off?
• Do I have other sources of income?
• Am I ready to repay the loan using my own funds?

Create a plan B:

• Minimizing costs in case of failure.
• Possibility to sell assets or IP.
• Switching to a subscription model or releasing short DLCs.

How to attract pre-orders and reduce dependence on loans

Even if you decide to take out a loan, it is reasonable to simultaneously look for ways to reduce the financial burden. One of the most effective tools is pre-ordering . It allows you not only to partially cover expenses, but also to test the audience’s interest in the project before its release .

Why launch a pre-order:

• Get your first money before the release;
• Make sure the game is truly engaging;
• Start building a community around the project;
• Increase your chances of a successful marketing campaign.

Where and how to start pre-order:

• Steam (Wishlist + Early Access) is a great way to get attention, especially if you have a trailer and demo.
• Itch.io – the platform provides flexibility in pricing and sales models.
• Your own website + payment system (for example, Gumroad, Boosty) – suitable if there is traffic or a community.
• Crowdfunding (Kickstarter, Patreon) helps not only raise funds, but also attract a loyal audience.

What to offer in pre-order:

• Access to alpha or beta version;
• Unique in-game items;
• Name in credits;
• Soundtrack, artbook or digital goodies;
• Closed Discord server for project supporters.

Important: Don’t set your expectations too high . All promises should be achievable and not take too many resources away from the main development.

A loan for indie game development is a tool that can speed up the project, make it better and more competitive. This is especially true if you invest not only in code and mechanics, but also in level design , visuals, sound – everything that forms the impression of the game. But a loan will only be useful if it is taken consciously, calculated to the smallest detail and accompanied by strict financial discipline. Approach the issue not as a way to urgently find money, but as an investment in a business – with all the ensuing consequences.

Questions and Answers