Possible alternatives: Fan financed indie film via DVD pre-sales, Distribution through YouTube + blog exposure + DIY screenings + DVD sales ?
1. I needed a couple of hundred dollars last summer to pay for an editing related expense for Date Number One, did not want to wait 'till I got my dayjob pay, so I asked a friend who likes my movies if he wanted to loan me the money. He said he will just pre-buy 10 DVDs of Date Number One instead of doing a loan, w/ units to be delivered to him whenever they are available for sale. It was a simple solution, so I went ahead with that transaction: 10 DVDs were sold in advance, I had most of the $s I needed to solve the editing problem.
2. I will go see (or buy or rent on DVD) works by certain filmmakers regardless of what reviewers & other audience members say about the works - stuff by Jim Jarmusch, Amir Motlagh, Hal Hartley, Jon Moritsugu, etc. Filmmakers with such a hard core fan base maybe able to pay for the production & start of distro (at least making a few thousand DVDs) cost of certain ultra-low budget films of theirs by pre-selling the DVD of the movie to their fans. Let's say Hartley wants to do an ultra-low budget digital feature for around $50,000. All he would need to do that film completely independently $s wise would be to have 2500 of his biggest fans pre-order the DVD to the new film @ $20 each.
So, idea/possibility #1 for today is the financing your ultra-low budget film through pre-selling the DVD to your fans idea. Could work well for some indie filmmakers. Could definitely work for Kevin Smith, since, last time I checked, he had over 10,000 MySpace friends for his most recent film Clerks II.
But what if you are just starting out, got a killer/audience pleasing film, but you are not Andrew Bujalski (i kid :), Mutual Appreciation deserves all the press its getting right now), anyway, back to the idea: you've got an awesome film BUT the big festivals or indie theaters or influential reviewers or distributors are not into your film? Possibly useful idea #2 of the day is about using YouTube + your blog + DVDs to sell your work to your audience.
YouTube gets a lot of press & thousands of people check out clips on that site every day. So post an excellent clip (or clips) from your movie on YouTube, maybe over the course of a few months you may get at least several hundred views. Direct (from the clip, add a title, also through links on your page) interested YouTube audience members to visit your website & or blog to find out more about your film & you & also to purchase a DVD of your film (get a PayPal account set up, will make the sale easier I think). Depending on the price of the DVD, over time you could make some very useful amounts of money from your D.I.Y. (Do-It-Yourself) DVD marketing & sales efforts. Also start up a blog & talk about your film, your YouTube clips, your experience with making & marketing & selling your film. Blogging should help you make at least some blogger friends, and that could mean more press for your film, more $s from your film.
Good luck. Later on.