I thought I'd share some of my experiences writing for microbudget movies -- in this case Marlowe (working title?), where I got to visit the set last November. I believe it came in at 200k. I'm told they target this number because SAG and the DGA have special contract provisions for films made at that budget. Other breakpoints are 600k and 1.7M.
Needless to say, everything is a challenge to fit into that budget. Actors are actually the easier part, since you can get talented but as-yet-unknown people willing to work to add to their reel and build up their credits -- and they'll work HARD.
Locations are the monster! You can't have very many of them and they can't be expensive.
We had several important scenes set in a Quickee Mart. Since they couldn't afford a big chain store like 7-11 or, my personal favorite, Circle K, they worked with a privately owned store (which actually had Quikee as part of the title--how fortuitous). One thing about mom & pop convenience stores -- they make a lot of their money on liquor, pornography, and lottery tickets. The Lotto was fine and the mom & pop had kids, so not much porn out in plain view, but there was a lot of liquor, and this being a kid's movie all that had to be hidden.
Big movies can make money off product placement. Small movies could too -- if they had the time and connections available to clear all the legal hurdles. We of course didn't -- so we had a bunch of the crew inside the store turning all the candy bars and bags of chips upside down or backwards so that their trademarks wouldn't appear on camera. A distressing number of candy bars have their trademarks printed on the back too! At the last minute they got a product placement deal from the Little Debbie people, so we were able to hide a bunch of stuff behind Devil Squares and so on. Debbie has our undying gratitude.
Another issue was that all the refrigeration units had to be turned off whenever they were recording for sound. The microphones are very sensitive and would pick up the hum. Being a convenience store, many of the refrigerators were filled with ice cream -- so you'd unplug them and have to plug them back in right away when they finished shooting. And you'd have to turn off almost all the power since the entire store is wrapped in refrigeration units!
Since that experience I've been a lot more conscious of using locations that don't involve batteries of brand names staring at the camera (for example, I'm now a big fan of the rural road produce stand -- but not on a paved road, because you need special permission to block those off).
ADDENDUM -- also, our Quickee mart apparently was the number one seller of lottery tickets in California!