Canadian Film Tax Credit Financing. You Need To Know This About BC & Ontario Credits Finance

THE INSIDE STORY ON TAX CREDIT FINANCE – CANADIAN STYLE

Information on Canadian film tax credit financing, How BC, ONTARIO and Animation Credits Are Financeable !


Canadian film tax credit financing. Clearly there is no secret path to financing a film, TV or animation project anywhere... Canada included... Ontario... BC... where ever. But one sure fire method of successfully completing a project is in fact your ability to monetize the tax credit.

From some of the sagas' and stories we hear the financing of a project in any of the above mentioned genres could well qualify for a script of their own!

Producers and owners of successful projects already know that there are some key elements to the financing of any project. In a way they are not dissimilar to the financing of any business...your owner equity. Debt of some form, and in our case also, the monetization of a tax credit.

Financing of entertainment projects in our 3 genres could not be any ' hotter ‘than in the current Canadian time frame of 2012. Also, for the first time one of Canada's provinces seems to be opting out of the tax credits - that's the province of Saskatchewan.

If properly structured and qualified your Canadian film tax credit financing in provinces such as Ontario, BC (British Columbia) and Quebec and cover anywhere from 30-50 per cent of your entire project budget. When revenue, distribution, pre-sales and other targets are a challenge the tax credit, when properly submitted and eligible becomes the more straightforward method of financing projects.

Tax credits are often referred to as ' soft dollars'. The one thing we've always found interesting about tax credit finance is that they don't really rely on the overall success of the project from a public acceptance point of view. When applying for and financing the film/TV/animation tax credit it’s very simply about meeting the technical criteria of the credit program itself.

It's therefore all about ' the spend' and the quality of the spend. And once you've qualified you then are in a position to monetize the tax credit - it becomes the collateral for extra cash flow. While in most cases that cash flow and working capital helps you on the current project it could of course be used for your next (hopefully successful!) production.

Tax credits are typically financed at a ' discount ' and a general norm might be in the 70% range - of course this varies per quality of the project and the experience and stability of the ownership team.

For successful eligibility and financing of Canadian film tax credit financing you require the services of a qualified tax credit accountant; that being a bit of a niche area of accounting. And with respect to the financing you need to be able to demonstrate that the credit can properly be assigned and that there are clear chains of title around your project.

Do you have to finance your film, TV and animation / transmedia tax credits? Absolutely, positively not. You can simply use the non repayable funds for any general corporate purpose. But if you, as a producer are challenged by successful project financing then the ONTARIO, BC AND QUEBEC tax credits can be a solid part of your overall financing plan.

Speak to a trusted, credible and experienced Canadian business financing advisor today on how you can successfully obtain.. and if you choose monetize and cash flow that same credit.

7 PARK AVENUE FINANCIAL
CANADIAN FILM TAX CREDIT FINANCING



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/canadian_film_tax_credit_financing_bc_ontario_2.html

Let Canadian Film Tax Credit Financing In Ontario And BC Finance Your Productions!

It's no mystery to us, that’s for sure. Canadian and U.S. content owners and producers are taking the 'flight to safety' , using Canadian film tax credit financing for Ontario , BC, and quite frankly all Canadian geographies for their financing needs .

Why that flight to safety? Why is Canada so under consideration these days when it comes to the film tax credit? (Film, television and digital animation) Well, just this week we caught three separate headlines out of U.S. states such as Michigan hinting strongly that tax credits will be pulled back, repealed, diminished, etc. Bottom line, less!

That certainly isn't the case in Canada, where a proper filing and certification of your claim (that is key) can net you anywhere for 30- 45% of your total production budget expenses. Help us understand, but isn’t that amount of assistance very valuable in allowing you to obtain the balance of your financing, through debt, equity, pre sales, product exposure, distribution, etc,.

The tax credit, furthermore, can be cash flowed to help monetize your project for working capital and cash flow as you go through your production spend.

Canada, similar to other geographies such as Australia, firmly seems to believe the payback in revenues, taxes, and general economic activity justifies the investments being made in your project.

Co - productions, when they qualify are eligible for the same sort of financing and assist you in attracting and finalizing the additional finance you need to complete your project.

When you finance the tax credit naturally the credit itself is the collateral for the loan - it’s in effect a bridge loan to get you the funding you need now or at the completion of your project. You do have the choice to simply wait for your non repayable cheque, but most independent producers prefer the pay me now to pay me later approach!

From a structuring viewpoint the tax credits sit kind of in the middle of your equity and senior financing, although if you borrow against the credit the credit it must be collateralized properly.

So how does payment work on a Canadian film tax credit financing for your Ontario and BC productions? Payments are great, generally there are none! That is to say that your advance on the tax credit - typically anywhere from 50-70% (sometimes more) is simply netted against your final cheque from the government, less the financing costs. Almost always no additional collateral is required, although the promise to pay of your Special Purpose Vehicle for the project is of course required.

Use Canadian film tax credit financing to enhance your overall profit potential on your project - don't give up additional equity or future profits you don't need to. Speak to a trusted, credible and experienced Canadian business financing adviser who can steer you through the film tax credit funding process, quickly, efficiently, adding profit potential to your venture.

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Stan Prokop is founder 7 Park Avenue Financial ; see

http://www.7parkavenuefinancial.com

Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:

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

Have Ontario CRA Sred R & D Tax Credits ? Finance Yours Today For Advantages Of Cash Flow !

Maximize or minimize ? What's best in Canadian business. In the case of taxes it’s minimize! In the case of cra sred R&D tax credits it’s maximize for advantages of cash flow!

Whether you are in Ontario or quite frankly in any of the rest of Canada how could you not afford to file a sr&Ed claim for the R & D your firm does on its innovative products and services? We are of course talking about the Canadian Scientific Research and Experimental Development tax credit program which provides refundable funds for a very significant portion of the funds your Canadian business spends every year in this key area the economy - i.e. the competitive edge area!

And, getting back to our maximize or minimize issue, recent figure suggest that almost 4 Billion (yes that’s billion with a b!) of cheques are going out every year to Canadian businesses such as yours. As we have said in the past, we are pretty sure you want those cheques to be cashed by your firm and not your competitor, since the funds don’t have to be paid back.

So, lets assume you are aware of the program, (many aren't) and lets further assume you are using the program either on a first time basis, or, if you're very lucky, you're a repeat offender! You therefore should be aware that your claims can be financed so you can take advantage of cash flow and working capital that would be beneficial to your firm today.

Many sred consultants (they are the specialized firms that prepare these claims) tell us that a proper preparation of your claim can exceed your initial estimates of what you can received by sometimes 11-200%. So you ability to create CRA SRED R & D tax credits that are of solid quality , file the claim, and then finance it for working capital simply accelerates all the benefits of the program .

Do you have to finance your claim? ask clients often? Naturally the answer is definitely not, but we certainly think you should consider it. Think of your claim as simply an account receivable, which of course it is. It's just that it's a very high quality receivable because it is a non repayable cheque that’s due your firm from the federal and provincial government. So in considering financing the claim you can of course simply wait for your cheque , or you can monetize, or 'factor' , or ' discount ' the claim . (All those terms are interchangeable and mean the same thing.)

Are CRA SRED R&D tax credits difficult to finance if you want the advantages of cash flow. Well, consider we a bit biased but we don’t think so, it’s a simple business financing application, with the additional back up being your sred claim and the required ability for your firm to be able to offer the tax credit up as collateral.

Speak to an experienced, trusted, and credible Canadian business financing advisor today to get more info on either the program itself of the financing of those R &D tax credits.

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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