SRED And Film Production Tax Credit Loans : Let Financing Be The Way Out

Don’t Let The Cash In Your SR&ED And Film/Animation Tax Credits Keep You Up At Night

OVERVIEW – Information on tax credit loans in Canada, Financing Sred and FILM production tax credits alleviate the waiting game when it comes to cash flow, working capital and investment recovery






Tax credit loans around the gov’t SR&ED program in Canada, as well as the similar credits available in the film/TV and animation industry in Canada have a lot of business owners and executives being kept up at night. Your ability to access the cash in federal tax credit programs should not be a worry, concern, or mystery that some might think it is. Let's dig in.

Some might question why we are grouping two different tax credit programs together for our discussion. Our answer is simple - both credits are financeable, they are financed in somewhat of a similar manner, the financing in both cases alleviates the waiting for the government cheques, and again in both cases SRED credits as well as Media credits provide valuable cash flow and working capital to current and future projects in either R&D and Media.


We think we can be further forgiven on that issue simply because it’s very possible to actually file SR&ED claims in film, animation being a good example of that.

Whether Canadian taxpayers like it or not these two programs provide Billions of dollars every year to claimants of SRED or Media Credits. In the film industry that has garnered Canada the reputation of Hollywood North,

and in SR&ED Canadian firms strive for innovation and market leadership in their industry and niches.

Let's take a look at the SR&ED program as it relates to preparation and financing of claims. It's important to ensure your claim is eligible, and both the government and the financier of your claim wants to minimize questions and fast track approval. Here the role of the SR&ED consultant is key. More often than not the consultant that prepares your claim has specific industry expertise and understands your field of endeavor.

When it comes to the financing of your claim we point out to clients that it's sometimes more challenging to finance your claim if it is prepared by yourself. Financiers like to get a strong sense of eligibility and chances of full approval. Many clients we meet have utilized the same consultant for years and actually have good dialogue with CRA auditors on an annual basis. That's a good thing!


In the Media/Transmedia industry (film, television and digital animation) federal and provincial programs focus heavily on providing tax credit incentives based on amount spent on productions which in turn generates taxes, employment, etc.

Again, similar to our R&D credits a combination of federal and provincial credits in Production, Service and Digital Media are available to Canadian productions and co-productions with qualified U.S. and international partners. These credits can often fund 40-50 % of a budget based on the point system that your Tax Credit Accountant calculates and presents.

Again, drawing to our similarity of these two major refundable tax credits both are financed in a very similar manner. Financings are structured as bridge loans, almost always with no payments being made during the term of the loan. A typical financing is 70% of the total value of your SRED or Media tax credit, the combo of federal and provincial claim. You receive the other 30%, less financing costs when your claim is funded by the government - the proverbial ' the chq is in the mail'.

If you're looking to maximize or replenish working capital, start on new projects, or recoup owner investment consider monetizing your tax credit in these two exciting areas of Canadian business.

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 needs around tax credit loans for SR&ED or Media. Finally, no more being kept up at night - financing your investments is a logical way out.



Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Tax Credit Loan Financing Expertise In Canada




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Why You Should Use Canadian Film Tax Credits For Your Film Production Financing

Don’t consider using Canadian film tax credits for film production if your film production has all the financing you need and your current projects are totally financed and will achieve a solid return on investment for your project.

Unfortunately, we haven’t met one producer or project owner in film, television and animation that seems to have all the funding they need and in place! We've heard they exist, I guess we just haven’t met them.

The Canadian government, and more often than not Ontario, British Columbia and the Maritimes are totally focused on providing you with non repayable funding for your projects in the genres of film, TV and the growing genre of animated features. They are offering, so what aren’t you taking?!

We are pretty sure the Canadian film tax credits have the same goal as in other parts of the world, namely stimulation of investment and employment.

If your film production (we will use that term interchangeably with tv/animation) requires additional funding (which project doesn’t) the provincial film funds can provide you with anywhere from 30 - 45% of your entire budget. And by the way , that’s not a loan , that’s tax credits that are certified and come back to you as the project owner in the form of a cheque - In Hollywood terms the government wants to ' show you the money ' !

We are often asked why Canadian film tax credits vary when we meet with clients and discuss broad ranges of per cent age funding of your project. It all comes down to a few simple issues around which of the 6 available tax credits you use (we recommend you use the one that will give you the most funds by the way!) and where your project is originated re shooting, production, development, post development, etc .

We encourage clients to seek an advisor who is trusted, credible and experiences in Canadian film tax credits for film production. That allows you to maximize your funding, ensure you are eligible, and, as we have said, allow you to 'max out ', so to speak, on the credits that are applicable to your particular project.

What you need to do is ensure your project qualifies and that you are aware of application, filing and other regulations that come into play that allow you to receive funds.

And oh yes, by the way. You could wait 3, 6, or even 12 months for your funds, but we recommend all clients assess the financeability of your credits before you receive the cheque. Financing your Canadian film tax credits allows you to monetize that future credit into a bridge loan, collateralized by the credit, and provides you with cash flow and working capital for your current production.

Financing your film production via the monetization of your tax credits involves just a few basics - ensuring you have your other debt and equity in place, validating your credit and budgets as eligible, and ensuring your financial filings are up to date.

Speak to a trusted expert in Canadian film financing to achieve additional funding for your projects - maximize on that film tax credit, and consider borrowing against it for funding you need now. Fade to 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/canadian_film_tax_credits_film_production.html