Striking Gold With Film Tax Credits

Tweet









Finance Ontario and BC Film Production Incentives

Prospecting for gold is probably tough, but we're quite sure prospecting for financing for your film, TV or digital animation projects is tougher. So why not get that ' striking gold ' feeling via Ontario and BC film production incentives and film tax credits.

The film industry in Hollywood North (aka Canada) is alive and very well thank you, and the generosity and relative straightforwardness of Canada's film tax credit system has sure helped in that regard.

There continues to be almost not a day when we don't hear or read about various film tax credit debacles in the U.S. - (The last title we say the other day read as follows " Officials prepare for a battle over whether to scarp 40M a year tax breaks for movie and tv...' ). That story originated out of Connecticut, and we're not pointing fingers at any particular state, its just that Canadian film tax credits for Ontario and BC Film production incentives seems to be a lot more easier and straightforward.. I guess we're biased a bit!

Canadian film tax credits and the financing of those tax credits have been in place for many years now. Each province has a film tax credit (there are 10 provinces in Canada) and the credit is in conjunction with CRA, which is the Canadian equivalent of the IRS in the United States.

As we have noted before Canada maintains that the money, jobs, and resultant tax revenue from the industry more than offset funds granted via tax credit certificates for the three parts of the industry - film, TV, and digital animation. (Actually there are some other credits for music and publishing).

Producers and project owners in both U.S. and Canada that choose to domicile there projects in Canada (i.e. film them here, post produce them here, etc) are in the enviable position of receiving funding for their projects from anywhere, in general.. from 30- 45% of their total budget. Yes, its still up to you as producer to arrange the other 55-70% but don't say you haven't a good start when you receive non repayable funds in the amounts that we have highlighted.

So you've 'struck gold '

with your tax credit certification? Is that all there is? Definitely not, as most producers and project owners choose to finance those credits for valuable cash flow and working capital.

By working with a trusted, credible and experienced Canadian business financing advisor you can get solid assistance in qualifying your claim, determining eligibility, getting your credits certified, and, finally, last but not least, financing these valuable credits for cash flow and working capital for your current or next project. If that isn't ' striking gold... we don't know what is!

Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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


'

Canadian Business Financing with the intelligent use of experience '


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.


Stan Prokop




Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/5868630

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

Tweet

Information on Canadian film tax credits. How to utilize film tax credit financing in your film production, tv and animation projects. Why not consider financing your film tax credit!

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, credible and experienced Canadian business Financing Advisor with a track record of success 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!



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 - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and 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

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

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.








Stan Prokop







Article Source: http://EzineArticles.com/5778686

Funding Films & Movie Finance In Canada : Film Tax Credits Are Your Ace in the Hole

Film Tax Credits Are The Big Surprise In Financing Movies / TV/ Animated Projects In Canada







OVERVIEW – Information on funding film, tv and digital projects in Canada. Movie and transmedia film tax credits are key to successful full financing of your project – Here is why and how




Funding films (as well as television and digital projects) in Canada via film tax credits is one of the most solid ways to help achieve full funding for your projects.

It probably comes as a surprise to many that the Canadian federal and provincial governments are in fact the ones that provide the funding for movie finance ( again, TV and Transmedia also ) via refundable tax credits . Financing those credits is your ' ace in the hole '

so to speak. Let's dig in.

Competition is good for any business, and there's certainly a fair share in the film tax credit business. Incentives provided by the province you film or produce in compete with U.S. states, as well as burgeoning film industries in many other countries. The film industry is somewhat unique in that many countries have chose to work together in a formal manner on productions - these are known as ' co -productions ' , and if a co-production treaty exists on your project tax credits derived from that are still valid.. and financeable!

As far as Canada goes projects tend to be function of geography or talent or in some cases the simple fact that the tax credit has the ability to finance anywhere from 30-50% of your budget. While many U.S. states that offer film credits are constantly in a debate over the real economic benefit the Canadian government and film industry forges on with generous credits to the tune of billions of dollars. Well over a 100,000 people are in fact employed in the media industry in Canada and billions of dollars in total revenues are associated with the industry.

Refundable tax credits in the film, TV and digital animation industry are known as ' soft money ' - their main purpose is simply to lower the overall cost of any movie, TV show, of special effects project. That ' FX ' part of the industry, digital animation is in fact probably the fastest growing part of the business, and in fact these credits (again also fully financeable) even have their own legal category of tax credit.

Because some projects in media might never pay for themselves refundable govt credits offset a large part of the risk that goes into any project. Top experts tell us that from the provincial and federal govt perspective the focus is as much on jobs, employment and taxation revenues derived from the multi billion entertainment industry.

So how are these credits financed? Job #1 is to determine which of several credits will allow you maximize funding. This is often, if not almost always done via a qualified film tax credit accountant.

They review the various ' tables ' provided by the provincial and federal body to determine how you can best navigate maximum funding.

After you've applied for and received your tax credit certificate/approval you're in a position to start your project, knowing full well that you've covered off a large part of the total funding package of any project which typically is owner equity, debt, tax credits, and specialized forms of funding particular to the film/TV/transmedia . Those include pre-sales, gap, print and advertising, etc.

Film tax credits are financed either on completion or during your project - the goal of both timeframes is dependent on your cash flow needs. Typical loans tend to be in the 70% range based on the total value of the credit. The financing is typically structured as a temporary bridge loan pending funding by the province and Ottawa (Note to non - Canadians - that’s our capital!) and the loan is collapsed one the govt remits on the project.

If you're focused on achieving ' ace in the hole ' status from your media financing needs 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 movie finance needs.




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 = CANADIAN FILM TAX CREDIT FINANCING EXPERTISE



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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


' Canadian Business Financing With The Intelligent Use Of Experience '





















Stan Prokop

Financing Film Tax Credits And The SR ED R And D Tax Credit : Think You’re Winning ?

The ‘ Second Coming ‘ Of SR&ED And Film Tax Credits Is : Financing !

OVERVIEW – Information on financing the SR ED ( SR&ED) R & D tax credit in Canada . Finance Research and Film tax credits accelerate cash flow and working capital for two great Canadian government programs



Financing the SR&ED R&D Tax Credit, or Media and Film Tax Credits is, in our opinion, equivalent to the ' second coming '. A bit of a play on words, but signifies the added benefit that a tax credit loan brings to the already good news inherent in a tax credit claim in these two solid Canadian programs. Let's dig in.


SR&ED

While there's been a few times over the last years when everyone, ourselves included, tried to figure out where SR ED was going it turns out that a lot of those changes simply solidified the program. While it's unclear whether the Billions of $ that the government provides via refundable tax credits will see a reduction in usage it’s absolutely clear on the other hand that the program is still in full force.

Yes, when it comes to R&D credit calcs some of the rates have dropped, and capital assets are no longer eligible - but truth be told the majority of claims have never really included the capital asset spend . Simply speaking the Scientific Research Experimental Development Program is still the largest program out there to allow Canadian business owners and financial mangers the ability to recoup their R&D spend.

Business owners can accelerate, or initiate that ' second coming ' by financing their SRED claim. While there seems little doubt that the government is committed to speeding up claim approvals ( they have level of service standards around claim receipt acknowledgement /processing and reviews ) this whole process in many cases can takes months and up to a year for the owner/manager to await the cheque for their claim.

Financing the claim simply accelerates the whole process - and super accelerations kicks in if you choose to finance next years claim - now! That's done by accrual financing, allowing you to start cash flowing next years spend!

FILM /ANIMATION/TELEVISION/MEDIA

The other industry that also generates Billions of dollars in refundable (and financeable!) claims is the entertainment industry in Canada. Although we say ' Canada’, approved joint ventures/co-ventures can also utilized tax credit programs and of course financing.

The tax credits that come with film/TV/ animation are a key part of any total financing package in the industry. They in many cases form the largest part of the total finance package. Ontario, BC and Quebec based productions garner the majority of the action, but almost all provinces participate. Using Ontario as example owners/producers can opt for any of the three major programs in place, OPSTC/OFTTC and OCASE.

FINANCING SR&ED and MEDIA TAX CREDITS

We comfortably can talk about bridge loan financing for both of these two programs because of key similarities. Those include:

1. Claims are either prepared by a specialty accountant or consultant in each area (SRED consultant / Film Tax Credit Accountant

2. Both Financings require a simple application with appropriate back up including a copy of the claim, any previous claim experience etc

3.Claims are typically financed at the 70% range of the total value of the combined Federal and Prov. claim

4. Financings are structured as Bridge loan with no payment being made during the duration of the loan

The main security in the financing is the claim itself

If you want to accelerate that ' Second Coming ' of a tax credit, i.e. the cash! 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 finance needs in this unique area of Canadian business finance.




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 = Canadian SR&ED & Film Tax Credit Financing Expertise




Stan Prokop









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

CRA SRED And Film Tax Credits : Is It Art Or Science Behind Financing Your Claims

Financing Canadian Tax Credits Shouldn’t Be ‘ Adventure Time’ ! SR&ED And Film Financing

OVERVIEW – Information on financing CRA SR&ED Credits and Film Tax Credits often makes maximum sense with minimal downside . Here is why, and how!




CRA Sred (SR&ED) and Film Tax Credits are quite a good example of the concept of success when it comes down to the question of ' art or science'. And that pertains to tax credit financing also; we maintain it shouldn’t be ' Adventure time' when it comes to the finance of your SRED or film, television and animation credits. Let's dig in.

It shouldn't be a secret (but unfortunately it is for many!) that Canada has some great (aka ' generous') business tax credits. In the case of our two examples:

SR&ED (sometimes called 'SRED ')

MEDIA

businesses in industry and entertainment can compete effectively with other businesses all over the world.


CRA Sred claims, in many cases involve some element of information technology. And when it comes to the media industry - film, TV, and animation ' IT' technology has rapidly changed the entertainment industry. That bodes well for Canada of course as it ranks high in the world for trained people, country stability, and a strong banking and straightforward ( mostly !) tax and tax credit system. In summary, top experts tell us that Canada has one of the best overall environments for research and entrepreneurship in the world.

The Canadian dollar is certainly one factor in the cost, and the financing of tax credit claims in research or film. In recent times the 'Canuck buck’ reached parity and has somewhat backed off. We'll leave the currency predictions to the experts - we'll focus on the actual financing of your credits.

SR&ED:

Sred credits are a combo of federal and provincial incentives. On a broad basis the thousands of companies that participate in the program receive a refundable credit (which can be financed for cash flow purposes) in the general area of 30% of their entire spend.

While the program was static for awhile some major changes CRA Sred (SR&ED) and Film Tax Credits happened over the last year or so. In some ways these to a certain degree affect the financing of your claim, but not in a dramatic or negative fashion. One of those changes is the elimination of machinery and equipment acquired in your R&D; so when it comes to financing your claim the overall financeable amount might in fact be lower given you can't claim assets acquired for research.

One other ' change ' in the overall philosophy of the program was to focus on who was preparing your SR&ED claims and what they were charging. That probably struck fear and terror into the hearts of the SR&ED preparer industry - known as ' SR&ED Consultants '. As in all aspects of business the dust eventually settles and good credible honest consultants that charge a fair price will always survive.

FILM / TV/ ANIMATION CRA CREDITS:

Producers of content in the media industry are eligible for tax credits also, and yes, they can be financed also! These credits are typically prepared by a qualified or experienced tax credit accountant - we suppose they are the medias equivalent of the SRED Consultant.

Producers/owners of Canadian content simply put together a request around which they are Vis a Vis ownership, their budgets, productions costs, funds spent, etc - In effects it’s a business application.

Tax incentives in the media industry can range from anywhere up to 40-50% depending on what is spent and in what categories. Credits are a combo, again, of federal and provincial incentives. Provinces compete somewhat ferociously for your film, TV, animation or Transmedia projects as they view the employment and capital spending in this area a valuable commodity.

Our focus is financing these claims, and some may wonder why we talk about two very diverse credits - i.e. SRED and MEDIA. Our response - simply that in some cases even Media projects, can file for SR&ED claims.

And with respect to the actual financing of claims financing is very similar. Bridge loans on your SRED and Film credits are structured as loans with no payment, and are reconciled at the end when the government sends you funds. Loans are typically in the 70% ' loan to value' area, and you receive the balance of funds, less financing costs when the government remits on your claim.

If you're interested in financing, or getting some help with preparation of your claim seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can eliminate a lot of the ' ADVENTURE’ when it comes to CRA SRED and FILM TAX CREDITS.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian companies , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded in 2004 - Completed in excess of 90 Million $$ of financing for Canadian corporations . Info re: Canadian business financing & contact details :

7 Park Avenue Financial = SR&ED and Film Tax Credit Finance Expertise



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Can You Afford Not To Use Film Tax Credits When Financing a Film In Canada - An Investor Primer

Whether it’s a 1 Million dollar independent production, or a 10 Million (or more) project how can you possibly overlook financing a film via film tax credits in the Canadian marketplace? It's no secret if you are ' in the know ' that the utilization of tax credit financing for Canadian film, television and animation projects is often a ' make it , or break it ' component of ultimate success for the financing of your project

The financing of film, TV and digital media productions has radically changed going back to the 1970's. There is even a school of thought that the independent or ‘indie’ projects are in effect impossible to finance. We'll admit that the challenge is significant , but we don’t buy into the ' indie movies are dead' school of thought , especially when you can utilize Canadian film tax credits for a huge ( often 30- 45%) of your production budget . And your ability to arrange independent financing for the tax credit just adds cash flow and working capital to your venture.

The other components of the producers total finance plan of course involve other elements such as foreign pre sales, completion bonds, and the debt and equity component of your project.

So is there a fool proof method to arrange, certify and finance tax credits in Canada in order to appease and satisfy your project investors. In Canada there is only a very small handful of banks which participate in film financing - therefore access to the key players and being able to satisfy their financial requirements is critical.

In Canada there are a number of film tax credits that are spread over Canada's ten provinces. The reality is that sometimes the nature of your project makes it more sensible to focus on a specific province based on your filming or production needs.

The Canadian government, similar to other world geographies, takes a bullish stance on the film, TV an animation industry. Their focus is jobs, tax revenue, and nationalism. Your focus is on getting your project financed.

Let's assume you have a solid finance plan, you have arranged the various components of your equity and debt... how can you now take advantage of financing a film via the tax credit component. It's simple if you have a solid team and advisor in place. By selling and or assigning your tax credits to an independent finance firm or bank you can monetize the credits for cash flow and working capital.

Solid detail in your production budget, a qualified opinion by a film tax accountant, and your experience in completing a project allow you to now monetize your tax credit either on completion of your project, or, if you prefer, on an accrual basis as you start spending on the production.


Financing film tax credits is done by structuring what in effect is a bridge loan based on the collateral of the tax credit . Your ability to provide investors with a solid return on investment through the utilization of effective film tax credits and their financing will only enhance your reputation and chances of project success . Speak to a trusted, credible an experienced Canadian business financing advisor on the proper benefit and utilization of tax credit in successful film, TV an animation financing.

-

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

Why You Need Film Tax Credits and Why the Canada Film Tax Credit System Works For Your Project

If they are offering, why aren’t you taking? That's what we ask clients when they bring us questions on film tax credits, how the Canada film tax credit system works, and , most importantly, how can they get their share!

You can call it of course anything you want, an incentive, a non repayable grant/credit, but the bottom line is that Canada has proven itself very serious in the introduction of very healthy tax credits that are non repayable and can form a significant part of your overall film, tv and animation credit financing strategy .

Ours is not to question why... but its pretty clear Canada is serious about stimulating and growing the Film, video and animation industries. The latter, animation is slowly gaining more traction everyday. Naturally job creation and tax and revenue generation from these projects is probably high on the list of ' why' for the government, but again, we want our clients to take advantage of the program, not to debate it!

The credits themselves come out of the government’s tax policy and while they used to be viewed as cumbersome the process has been significantly streamlined over the years, and the overall generosity of the program has continually been increased.

The tax credit is clearly a financial incentive, but at the end of the day we find out clients aren’t viewing it as much as an incentive as in fact a key part of their overall financing strategy. It's necessary to step back and understand the key components of a project financing and why film tax credits have clearly gone straight to the top of the pile as a ' must have ' relative to your overall project financing .

Depending on where you shoot, product, or post produce your project the credits can be anywhere from 25- 45% as a general range. (It varies by project and by genre of project - i.e. Film vs. animation, etc).

The Canada film tax credit provides you with a certificate which is then monetized by the government in the form of a non repayable cheque. Naturally in a perfect world you would arrange your debt and equity financing for your project, calculate your tax credit on the project and then consider yourself fully financed. The tax credit cheque would come from Ottawa after you have filed for it along with the tax filings you have submitted for the specific legal entity project.

But, alas, it’s not a perfect world apparently, and boy could your independent project utilize those funds sooner rather than later. That’s where film tax credits, when financed, can bring valuable cash flow and working capital to your project. When properly financed with the right partner finance firm your credits can greatly assist in the cash flowing of your project, providing valuable working capital during production. We read one article recently that referred to your overall project financing as a ' toolkit ' with a number of potential financing tools inside. Clearly the Canadian film tax credit is one of those tools!

The logistics around the financing of your tax credit can be as simple or as complicated as you make them. Our clients choose simple, so they surround themselves with a good media accountant and legal advisor, they have a finance budget and strategy in place, and they borrow against that eligible tax credit. With the right team around you, you can specifically identify exactly how much you will receive and what amount can be financed.

So , bottom line, call it a subsidy, call it a grant, call it a tax credit, call it anything you want, but utilize the Canada film tax credit as a key role in your independent film, tv or animation strategy . Speak to a trusted, credible, and, oh yes, experienced Canadian business financing advisor who can assist you to prepare and monetize your claim.
-


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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Film Tax Credits Canada – Creative Finance That Is Real And Works!

If your production in film, television or digital animation requires financing then Film Tax Credits in Canada are solid ways to augment your overall finance plan. In order to finance your credits your tax credit certificates must of course qualify for Canadian content in the appropriate categories and must satisfy the rules set out by Ottawa and your province relative to personnel and production costs.

In the last couple years the government has made a commendable effort to streamline the application processes for film tax credits and we must remind readers that these credits apply equally to the television and digital animation areas.
In the digital animation areas you might also be eligible for SR&ED credits under what is known as the Scientific Research and Experimental Development program. This is without a doubt Canada’s largest program for tax credits, far surpassing the film, TV and animation area

Financing of productions can be very traditional or very creative, but without a doubt tax credits can play a key role in either total finance strategy. Typically productions are financed in the following manner: Non studio producers, i.e. the independents arrange distribution and pre sales of the project. Typically you are entering into an agreement to give the other party the rights to display your production via TV, DVD, etc in that particular geography. Many pre sales budgets we have seen show a best case and worst case pre sales scenario. The pre-sale financing are, in effect, promissory notes to your special purpose entity for this production. The next financing challenge is to ‘finance’ those promises to pay for a number of different finance entities, including banks, specialized firm finance firms in Canada, etc. In Canada 2 or 3 of the nations banks are somewhat actively involved in this area – while others shun the industry as too high risk for traditional lending.

You of course are also required to post a completion bond covering cost over runs and the ultimate completion of your project.
Film tax credit financing is one of the final elements of your overall finance strategy. Your tax credit is, in Canada, in essence a government subsidy, so why shouldn’t you take advantage of it. Tax credits finance a very large part of what is known in the industry as the ‘below the line ‘budget. These are, in effect, your actual production expenses.
You therefore must ensure your production qualifies for the right expenses, and typically those are validated by an accountant or firm with entertainment accounting experience. By utilizing a Canadian actor component , as well as technicians and other resources you have set your project up to both qualify for the tax credits, and, then more specifically to cash flow or sell these credits .

In order to finance your credits you should have an overall finance plan, and a strategy for the equity and debt components of your production. Validate your budgets and ensure your productions have the required ‘points’ in order to qualify. Film tax credits can be financed on filing, or, more popularly, as you spend funds, which are then re imbursed via the tax credit financing.
Speak to a trusted, credible, and experienced film tax consultant around your ability to maximize and capitalize on this critical strategy within ‘Hollywood North’, aka Canada!
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/FILM_TAX_CREDITS_CANADA_FILM_TAX_CREDITS.htm