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The Role Of Film Tax Credits In Canadian Film Financing
Information on the key role that film tax credits play in Canadian film financing projects
Various programs are available under different provincial and federal legislation. The Canadian film industry, as well as related Digital and Multimedia industries, seem to be on a healthy rebound which we can attribute to a recovering economy, and a faltering industry in the U.S., again, economically related.
There are a number or very specific programs that can be financed to generate, or recover, funding for your projects. Along with the aforementioned SR &ED program, there is the Ontario Film and Tax Credit, a similar B.C. program, etc. These are generous government credits that allow for a significant reduction in your projects labor costs , typically between 40-50%. The combo of digital media credits, as well as your ability to finance all these credits help cash flow your project!
In many instances our firm can originate financing on an interim basis, in order that your project does not have to wait for funding after completion and final claim finalization and adjudication. Much of the financing that is done in the SR ED, film tax, and Digital and Multimedia areas is a very boutique and specialize financing. However. If you clearly qualify for these programs your claim can be financed. Traditional institutions, such as the Canadian chartered banks do not really play a major role in these types of tax credit financings.
Naturally the benefit of financing such a claim is simply the recovery of funds, almost all of which are ‘ non- repayable ‘ ‘ grants’ that will assist Canadian firms in the completion of their projects and for general working capital purposes . If your firm has significant or major contracts with either the government or a corporate client you require financing to complete the project in a timely and proper manner.
Tax credit financings, in our experience typically take approximately 2-4 weeks to complete. We strong recommend that firms work with a trusted and experienced advisor in this area to ensure they maximize the benefits of such a financing with respect to a solid rate, term and structure based on the unique nature of their claim.
Financing of these programs encourages continued innovation, and more and more funds are available for the film, multimedia, and digital sectors of Canada. Again, we stress the importance of working with qualified parties who can maximize financing benefits and assist you with your working capital needs.
‘Cash flowing’ your project either during or after production has a significant appeal to players in this Canadian industry sector. Naturally there has to be a reasonable investment of time in key areas related to the financing. In order to finance a claim properly entities should be incorporated as a Canadian taxable corporation and should have made the appropriate corporate filings. Naturally your project has to be certified, which can be done through various entities such as Cavco. Financing and documentations is clearly strongly associated with proper and up to date filings and certifications.
Accounting systems and processes typically might not be the forte of firms in the digital, multimedia and SR &ED sector – however it is important that owners and financial managers in t these industries ensure all costs are properly accounted for and documented in their financial statements and tax filings. Filings should be up to date with all federal and provincial bodies with respect to tax returns, and of course your application will be reviewed and audited by the proper authorities.
In summary, Canadian digital, multimedia, film and SR &ED expenses can be financed to maximize your firm or projects working capital. Ensure you are certified and eligible, focus on good accounting and information systems re your claim, and work with a trusted and credible advisor with financing experience in this area. It’s all about the cash flow!
7 Park Avenue Financial :
http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
7 Park Avenue Financial
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
