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                                                                 EXHIBIT 10.26.C


                                THIRD AMENDMENT
                               TO LOAN AGREEMENT

THIS THIRD AMENDMENT TO LOAN AGREEMENT (this "Agreement") dated this 27th day
of September, 1997, by and between IMAGE ENTERTAINMENT, INC. a California
Corporation ("Borrower") and UNION BANK OF CALIFORNIA, N. A. ("Bank").

Whereas, Borrower and Bank have previously entered into that certain Loan
Agreement, dated December 17, 1996, (the "Loan Agreement"), pursuant to which
Bank has agreed to make certain loans and advances to Borrower and Amendments
thereto dated February 5, 1997 and February 28, 1997 (the "Agreement").

Whereas, Borrower has requested that Bank agree to amend certain provisions
contained in the Loan Agreement; and

Whereas, Borrower and Bank have agreed and intend to hereby amend the Loan
Agreement.

Now, therefore, the parties hereby agree as follows:

     1.   DEFINED TERMS.  Initially capitalized terms used herein which are not
otherwise defined shall have the meaning assigned thereto in the Agreement.

     2.   AMENDMENT TO THE AGREEMENT.

          (a)  Section 1.1 The Revolving Loan shall be deleted in its entirety
and a new section 1.1 shall be added as follows:

               1.1 THE REVOLVING LOAN. Bank will loan to Borrower an amount not
               to exceed Fifteen Million Dollars ($15,000,000) outstanding in
               the aggregate at any one time (the "Revolving Loan"). Borrower
               may borrow, repay and reborrow all or part of the Revolving Loan
               in amounts of not less than One Hundred Thousand Dollars
               ($100,000) in accordance with the terms of the Revolving Note.
               All borrowings of the Revolving Loan must be made before November
               30, 1998 at which time all unpaid principal and interest of the
               Revolving Loan shall be due and payable. The Revolving Loan shall
               be evidenced by a promissory note (the "Revolving Note") on the
               standard form used by Bank for commercial loans. Bank shall enter
               each amount borrowed and repaid in Bank's records and such
               entries shall be deemed to be the amount of the Revolving Loan
               outstanding absent manifest error. Omission of Bank to make any
               such entries shall not discharge Borrower of its obligation to
               repay in full with interest all amounts borrowed.

          (b)  Section 1.3 The Borrowing Base shall be deleted in its entirety
          and a new section 1.3 shall be added as follows:

               1.3 BORROWING BASE. Notwithstanding any other provision of this
               Agreement, Bank shall advance funds under the Revolving Loan,
               eighty percent (80%) of Borrower's Eligible Accounts for
               outstandings up to Fifteen Million Dollars ($15,000,000) plus
               forty-five percent (45%) of Borrower's Eligible Inventory. In no
               event, however, shall the aggregate amount of advances based on
               Eligible Inventory exceed, at any one time, the sum of Six
               Million Dollars ($6,000,000). If the aggregate dilution rate as
               measured on a two quarter consecutive basis, is ten percent (10%)
               or greater of the accounts, the advance rate against accounts
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               receivable shall not exceed seventy-five percent (75%); and if
               the Aggregate dilution rate as measured on a consecutive two
               quarter basis, is Fifteen percent (15%) or greater of all
               accounts, the advance rate against accounts receivable shall not
               exceed seventy percent (70%). If at any time Borrower's
               obligations to Bank under the above facilities exceed the sum so
               permitted, Borrower shall immediately repay to Bank such excess.

     3.   Except as modified hereby, the Loan Agreement shall remain otherwise
unchanged and in full force and effect and this Agreement shall be effective
from the date hereof and shall have no retroactive effect whatsoever.

In Witness Whereof, Borrower has executed and delivered this Agreement.

"Borrower"
Image Entertainment, Inc.



By:  /s/ JEFF M. FRAMER
     -----------------------------
     Jeff Framer, CFO

Accepted and effected this 27th of September, 1997, at Bank's place of
business in the City of Los Angeles, Sate of California.

"Bank"
Union Bank of California, N.A.


By:  /s/ RONALD L. WATTERWORTH
     -----------------------------
     Ronald L. Watterworth, Vice President