You're offered your first feature commission. You're super excited. Then the producer tells you it will be on a deferred payment basis. Do you panic, throw your dummy out of the pram and demand payment up front? No... and here's why.
I've seen plenty of new writers on the web tell other new writers they should never work for free and they should always ask for payment upfront. Absolute nonsense! They are probably still wondering why they have yet to land a commission themselves.
As a new writer it would be almost impossible to get paid upfront for your first commission. Your writing might be awesome and the best they've ever seen, but you're untried and you don't have any box office figures to back up your talent. Therefore you're considered a risk and no one is going to pay you upfront because of this.
Most features are paid on a deferred payment basis, especially low budget features. The producer doesn't want to pay out his own money if the project never makes it to production. And why should he? Doing this for even just one project could lead to that producer being bankrupt.
So for a writer it's a gamble to write a screenplay for a deferred payment. If it doesn't get funding or go into production you'll never see a penny. It's also a risk for the producer, relying on the strength of your talent to provide the funding to get your words shot. But it's a risk worth taking.
Writing that first commission on a deferred payment gets you off the ground. It gets you a credit. It launches your career. You can put it on your CV. So what if it doesn't get funding and never gets made, producers know projects fail to get funding, or get made, all the time. You were commissioned to write something, that says something about you. Fingers crossed your screenplay gets funded and goes into production within a couple of years and you get paid. Happy days if it does!
Sometimes though it won't get funding and you won't get paid, but at least you'll still have the experience of writing to a brief and a deadline to fall back on for your next commission. You could always ask the producer for a small payment up front, a couple of thousand maybe, just to help with your living expenses while you write the screenplay. Most producers will understand and won't mind you asking. You might even get lucky and find they do pay you an advance.
Remember it's easier for the producer to get funding if he has a script ready to go and a lot more difficult if he doesn't. Would you part with your money for just an idea? Then why should they?