How To Stop Worrying & Love Independent Movie & TV Production – Spoiler Alert It’s The Film & Television Tax Credits Via Govt Refund !

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Film Tax Credits Aren’t Romantic

But They Will Help Finance & Finish Your Independent Film & TV Productions!

OVERVIEW - Information on film and television tax credits in Canada. Financing your Cavco tax credit and production incentive credits via the government refund program helps to cash flow your project - today

Film and Television tax credits in Canada , via government refund of your refundable tax credit hardly sounds ' romantic' or ' exciting' when it comes to this huge part of the entertainment industry in the Canadian market . As one recent market observer remarked, these credits helps pay for the tinsel in tinsel town, aka Hollywood north... aka ' Canada '!

How key a role do these production incentives/ Cavco credits play in the financing of movies and TV and animation projects in Canada? Quite a huge role, as you'll see. Let's dig n.

Almost all Canadian provinces offer tax incentives, via refundable tax credits to owners/producers of independent projects. Canada has naturally evolved as a great place to film and produce movies and television. In certain cases even the geography, i.e. where you film in fact garners a larger credit refund.

Independent producers/ owners of projects face a daunting task - however basic. That task? How to pay for the entire project. While large well known studios can fund entire projects the independent must fund via a variety of mechanisms, often which are ' cobbled' together to finance a project.

Those other parts of the financing puzzle? They include but are not limited to:

Pre sales
Territory / Geographical rights
Distribution agreements
Gap Financing/letters of credit/short term loans
Crowd funding/hedge funds

These financing vehicles, along with film and TV tax credits allow producers to have all, or more creative control in their projects given they have no backing from major studios.

The most interesting fact about the tax credit financing part of a film/TV or animation project is that the lender that finances the tax credit is not dependent on the commercial success of the project. And given that these production incentive credits can finance anywhere from 30-50% of an entire project it's easy to see the importance.

Refundable tax credits in Canada are all about Canadian content. Producers, along with their tax credit accountant pick one of two main credit categories, the Production Credit or the Services Credit. These credits cover labor and service costs associated with the project.

Financing your tax credit, once you’ve applied for and received your credit is a very straightforward process. These are in effect bridge loans with your tax credit being the main collateral . Typical loans are 70% of the combined federal and provincial credits. No payments are made for the duration of the loan and when final government funding occurs you receive the balance of the credit, i.e. the other 30%, less financing costs on the 70% that was financed. A great cash flow strategy for the current project, or your next one.

If you want to limit the worrying that comes with financing independent film and TV projects in Canada seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you finance those govt refunds.




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

The Real Truth On Canadian Film Tax Credit – Let Movie & Animation Financing Refund Loans Enhance Your Project

You already have the financing in place that it takes to make a winning film, animation, and TV project successful - you just might not know it.

We're talking about the Canadian film tax credit system, and why movie and animation refund financing of your tax credit can be the last piece of the puzzle in your Canadian production, or U.S./Canadian co -production.

The reality is, and of course we're sorry (kind of ...) that more and more U.S. regions are eliminating or downsizing the film and animation tax credits that can often make or break your projects final success. In fact, using Hollywood California as an example, as at June 2011 the state has in fact used up all their tax credits for the remainder of the year! No wonder why U.S. and of course Canadian producers and owners realize the Canadian system is still committed to job creation and support of the industry.

Ours has never been to debate the merits of the Canadian film tax credit (animation and TV included of course)... Ours has been to promote it and ensure our clients are using it. In Canada , aka Hollywood North the tax credits are viewed in all provinces as great economic and tourism development, and, as we said , we're not arguing!

In Canada the film, TV, movie and animation credits can generally get up to 40% of your project financed. That of course leaves the other 60% up to you, but what a great head start!

Although most producers and owners think of the Canadian film tax credit in terms of movies/ film etc. the Digital media area is probably growing the quickest. 6 of Canada's ten provinces already have a separate special digital media tax credit in place.

B.C. has a very strong and growing animation environment (could that be because of its proximity to California?!) and provides 17 1/2% credit to your total labour cost on any project.

While most U.S. and Canadian producers always tend to think in terms of Toronto, Montreal and Vancouver as major film and production and animation centres the reality is currently that the most lucrative digital tax credit is out of Nova Scotia. They have a very simple formula, 50% of expenditures that qualify under the legislation, or 25% of your total budget. Your tax credit accountant and Canadian business financing advisor can assist you in maximizing what works best for your project.

Quebec also increased and broadened its tax credits, with 25% of all expenditures qualifying for a Canadian film tax credit refund. When you compliment this with the federal Productions Services tax credit an additional 16% of financing becomes available.

Naturally there are all sorts of nuances in maximizing and qualifying for your tax credits. Producers should in general always set up a special purpose entity and typically should own the copyright or content.

Your tax credits in Canada can be financed, either through traditional sources, or independent firms specializing in this type of financing, also at the same time usually helping you maximize the credits. Financing is available on a ‘when completed ' basis, or, often more desirable, on an accrual basis as you start to spend on your project. Bottom line: Cash flow and working capital for your project.

So, as we said your challenge is equity, debt, gap pre -sales, etc. But let tax credits be the final component to your projects success.

If you choose you could creatively carve out the tax credit from your overall finance plan and enhance the equity position, of simply finance the credit refund on its own. Use your tax credit to either attract an investor, or as a stand alone component.

When you want the real truth and current dynamics of the Canadian film tax credit and refinancing strategies speak to a trusted, credible and experienced Canadian business financing advisor.

P.S. Mr. Demille - we're ready for our (tax credit) close up!

The Real Truth On Canadian Film Tax Credit – Let Movie & Animation Financing Refund Loans Enhance Your Project

You already have the financing in place that it takes to make a winning film, animation, and TV project successful - you just might not know it.

We're talking about the Canadian film tax credit system, and why movie and animation refund financing of your tax credit can be the last piece of the puzzle in your Canadian production, or U.S./Canadian co -production.

The reality is, and of course we're sorry (kind of ...) that more and more U.S. regions are eliminating or downsizing the film and animation tax credits that can often make or break your projects final success. In fact, using Hollywood California as an example, as at June 2011 the state has in fact used up all their tax credits for the remainder of the year! No wonder why U.S. and of course Canadian producers and owners realize the Canadian system is still committed to job creation and support of the industry.

Ours has never been to debate the merits of the Canadian film tax credit (animation and TV included of course)... Ours has been to promote it and ensure our clients are using it. In Canada , aka Hollywood North the tax credits are viewed in all provinces as great economic and tourism development, and, as we said , we're not arguing!

In Canada the film, TV, movie and animation credits can generally get up to 40% of your project financed. That of course leaves the other 60% up to you, but what a great head start!

Although most producers and owners think of the Canadian film tax credit in terms of movies/ film etc. the Digital media area is probably growing the quickest. 6 of Canada's ten provinces already have a separate special digital media tax credit in place.

B.C. has a very strong and growing animation environment (could that be because of its proximity to California?!) and provides 17 1/2% credit to your total labour cost on any project.

While most U.S. and Canadian producers always tend to think in terms of Toronto, Montreal and Vancouver as major film and production and animation centres the reality is currently that the most lucrative digital tax credit is out of Nova Scotia. They have a very simple formula, 50% of expenditures that qualify under the legislation, or 25% of your total budget. Your tax credit accountant and Canadian business financing advisor can assist you in maximizing what works best for your project.

Quebec also increased and broadened its tax credits, with 25% of all expenditures qualifying for a Canadian film tax credit refund. When you compliment this with the federal Productions Services tax credit an additional 16% of financing becomes available.

Naturally there are all sorts of nuances in maximizing and qualifying for your tax credits. Producers should in general always set up a special purpose entity and typically should own the copyright or content.

Your tax credits in Canada can be financed, either through traditional sources, or independent firms specializing in this type of financing, also at the same time usually helping you maximize the credits. Financing is available on a ‘when completed ' basis, or, often more desirable, on an accrual basis as you start to spend on your project. Bottom line: Cash flow and working capital for your project.

So, as we said your challenge is equity, debt, gap pre -sales, etc. But let tax credits be the final component to your projects success.

If you choose you could creatively carve out the tax credit from your overall finance plan and enhance the equity position, of simply finance the credit refund on its own. Use your tax credit to either attract an investor, or as a stand alone component.

When you want the real truth and current dynamics of the Canadian film tax credit and refinancing strategies speak to a trusted, credible and experienced Canadian business financing advisor.

P.S. Mr. Demille - we're ready for our (tax credit) close up!





Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.comOriginating 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 .Info re: Canadian business financing & contact details :

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