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Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Sunday, June 6, 2010

Financing Your Independent Film , Movie and Animation via Tax Credits

Independent film, television and animation players in Canada are always, it is very safe to say, looking for financing for their productions. One of the best ways to compliment your overall financing strategy in the three sectors of this industry (film/movies; television; digital animation) is to utilize your tax credits in a unique and innovative manner. Let’s explore what that is being done more and more, and some of the how to’s in this very unique area of financing in the Canadian entertainment industry.

The financing we are discussing is against the backdrop of very aggressive government assistant in this segment of the Canadian economy. Rather than back away from the sector after the 21008-2009 global economic turbulence provincial and government bodies stepped up to the bar, so to speak, and in fact increased their support in this area of the industry. Traditionally film and televison were the focus of the tax credit assistance, and recently the government has included digital animation as another key vertical in this sector of the industry.

Is there a simple explanation to the financing we are discussing? Yes there is – it is simply your ability to convert your tax credits, which have in fact significantly increased, into cash! The ability to generate cash flow and working capital from your tax credit assists you in of course completing your project successfully, and at the same time ensuring stakeholders such as owners, investors, and debt holders view the project as financial viable a mutually profitable for all stakeholders. That’s a good thing.

Tax credits have been available in many countries, including the U.S. for years. We can surmise the governments have supported these strategies to help ensure the overall competitiveness of the industry. Clearly the revenues generated by the industry from box and gate receipts, let alone labour and production spending are very significant.

So what does the strategy entail? Simply speaking you should ensure you are working with a trusted advisor in this area – someone with credibility, experience. At the same time you should ensure you are filing for eligibility under any one of 6 tax credit available, using the province of Ontario as an example. Tax credits are available of course in other provinces also, with B.C. and Quebec industry segments flourishing equally as well.

Proper planning is the key to financing your tax credits, and if you can prove you have a solid budget and finance plan , along with management and operational capability you can even ‘ pre-finance ‘ your credits in most circumstances . Again, credibility is the key here, and a track record in the industry is not 100% mandatory, but certainly helps.

Financing is made similar to the concept of ‘mortgage lending ‘i.e. on a loan to value basis. Typically you can expect to receive anywhere from 40-80% of your tax credit claim in cash. Factors that affect this amount are the timing of your filing, the quality of the filing, and of course the amount of the claim.

Naturally the ‘pieces ‘of the complex film/ tv/animation financing puzzle can be complex – whether they are bank financing, gap financing, distribution sales, and of course our own tax credit financing strategy. Film, TV, and animation Tax credit financing is a great way to complement the other pieces of the entertainment financing conundrum.

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http://www.7parkavenuefinancial.com/Financing_Independent_Film_TV_Animation_tax_credit.html

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