The Digital Media Tax Credit In Canada : Financing Interactive Credits

Feeling Jilted On The Ontario Digital Media Tax Credit ? Don’t Panic – It’s Still Financeable!

OVERVIEW – Information on the digital media tax credit in Canada . Recent changes to the program don’t eliminate your ability to finance these refundable credits

The digital media tax credit in Canada allows Canadian firms to maximize their efforts in the oft exciting world of digital media. Recent changes will dramatically affect which firms can qualify for those refundable interactive credits in Ontario in particular. Let's dig in.

One way to look at the 'OIDMTC' is to view it as a financial tool that allows your firm, or project, to be financially successful , if only for the reason that work in this area is both capital , and people, intensive. Governments, and in particular the Ontario government have supported this sector... shall we say... big time. That has allowed Canadians to gain international prominence for work in digital and transmedia efforts.

The work done in this area of entertainment allows Canadian firms and projects to be recognized as well as capitalize on individual projects. The ability for the work done inside the digital media tax credits allows firms and projects to maximize revenue as well as gain critical acclaim.

Many firms ( but not all as we shall soon see ) that apply for the credit are early stage firms and cannot qualify for any other type of financing, much less Canadian chartered bank loans or credit facilities. They need the financing acquired under ' OIDMTC' credits to attract human capital and stay competitive with international competitors.

Smaller firms in particular have trouble achieving financing solutions for their work and traditional VC or Private Equity financing is more often than not totally unavailable in this sector of the market, notwithstanding the fact that out of some very small companies emerge some major firms over time. Experts tell us that over 4 Billion dollars in revenue is generated by Canadian firms in digital media in recent years.

What types of firms are in this sector and qualify for Digital interactive media credits? They include those in film, social media, mobility offerings, gaming, etc.

A CHANGE HAS COME IN ONTARIO: Recently introduced legislation in the province of Ontario has dramatically changed who can qualify for the Digital Media Tax Credit. That change has mandated that the credit can only be utilized for ' entertainment/educational products for children under 12 years old '! This has eliminated many applicants such as newspapers, mfg companies, insurance firms, and yes... even banks! who have utilized the program for developing ' apps ' and other digital media offerings?

The digital interactive tax credits provide an approximate 40% refundable credit on all work such as labor and marketing. In 2014 the Ontario govt paid out almost 90 million dollars of this tax credit... with that number seeming to grow all the time! Industry experts in Ontario indicate that amt may be cut in half. The credit though remains very competitive with those offered in Quebec and B.C.

So what's our bottom line?

Simply that even though the game rules have changed in interactive credits, particularly in Ontario these credits are still 100% financeable. Financing for refundable interactive credits is structured as a bridge loan, with an advance of approx 70% of the total credit you have received. No payments are made for the duration of the loan and the loan is collapsed when the govt sends your refund chq.

If you're interested in financing OIDTMC tax credits seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your refundable tax credit financing needs.


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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN DIGITAL MEDIA INTERACTIVE TAX CREDIT FINANCING


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com

ABOUT THE AUTHOR
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.






' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Sred Funding Film & Digital Media Tax Credit Financing In Canada . Eliminating Glitch In Finances Of Tax Credits

We Are Not Pigs At The Trough … We’re Just Maximizing Canada Tax Credit Incentives for Cash Flow



OVERVIEW – Information on SRED funding and digital media tax credit and film financing in Canada . Use tax credits to cash flow your government programs – Everyone else is




Tax Credit financing in Canada. Certainly any form of a business tax credit conjures up images of Canadian business as ' pigs at the trough' - taking maximum advantage of government programs in a manner that connotates greed.

So what is our point today? Simply that utilizing valid government programs such as the SR&ED program, or the digital media tax credit designed for film and animation projects is simply smart business sense. And when you finance these very legitimate and established programs you’re simply ' cash flowing' those two government programs to ensure business and economic sense. Let's dig in.

No one doesn't admit there are ' naysayers' around these two programs. In fact the SRED (Scientific Research Experimental Development) program went through what can be only called a major overhaul in the last year or two. When all the dust settled though Canadian business owners were still eligible for approximately 40% or so of their R&D expenses via a tax credit.

Most people probably agree that the biggest change under the program, and it certainly affects the financing amount quite a bit, is the end of being able to get credit for equipment assets under the program covered. So that typically in the past has included computer equipment, lab equipment etc that was obviously needed for the research.

However, even if you back that component out the SRED credits are still very valuable, and, when financed, provide a strong source of cash flow and working capital for firms committed to spending. And to make out point, one of Canada's leading business publications stated awhile back that a solid portion of growing companies in Canada used SRED tax credits and financing thereof for almost 1/4 of all their external financing needs.

SR&ED funding in Canada is a very basic process. Claims are generally financed at 70% of their total federal and provincial level. Transactions are structured to maximize finance benefits for your firm - the structure is really a bridge loan, without payments, that gives you cash today for your tax credit tomorrow. Simple as that. That allows companies to access valuable working captial prior to the government doing their usual thing on validated your claim, and processing your annual return, etc.

Oh, and by the way, the biggest new trend in SRED funding is the ability to cash flow next years credit now. There’s a cash flow advantage!

Changing lanes very quickly, let’s recap the Digital media tax credit used for film and animation projects in Canada's media and Transmedia industry. It's not secret to most that Canada enjoys the nickname HOLLYWOOD NORTH.

Canada's film tax credit industry pulls in hundreds of Canadian and foreign producers because we have what can only be described as ' healthy ' tax credits that help fund productions. And these, as we have noted, are financeable! So when you see a movie that looks like ANYTOWN USA it just in fact might be the corner of YONGE AND DUNDAS in Toronto, or STANLEY PARK in Vancouver, or Montreal's Laurentians.


Canada recognizes the contribution in revenue, taxes, and image enhancement by this industry; As such productions get tax credits for the amount they spend in Canada for production spending, and to certain degrees cast and crew, etc

The film tax credit is financeable also, and often is the final straw in a total financing package that allows the production to move forward. Other elements include producer equity, pre-sales, advertising budgets, etc.

While SRED and film tax credits are hardly related relative to their respective industries they are financed in pretty well the same manner - IE bridge loans funded based on specific amounts as validated by a good film tax accountant that maximizes your spend credit .

Film and Media projects in Canada tend to be out of Toronto, Montreal and Vancouver. In fact the provincial domains of those three great cities compete fiercely for your tax credit business, as most politicians seem to believe their provinces recoup tenfold in economic activity.

So, bottom line, we can sit around all day and talk about PIGS AT THE TROUGH, or MANNA FROM HEAVAN. Our point is simple. SRED and Film tax financing maximizes these two legitimate and available programs. Utilize them while you can to enhance your business success.

Seek out and speak to a trusted, credible and experienced Canadian busines financing advisor who can assist you in your tax credit financing needs.




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 10 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/sred-funding-digital-media-tax-credit-film.html


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com






































Stan Prokop