How to ace film funding and film incentives for film tax credits in Canada

No shocker to yourself – film funding doesn’t happen by itself. Film incentives offered by the government in Canada and the film tax credits themselves play can play a huge role in the successful completion and financing of your film, TV, and digital animation projects in Canada.

As a producer, director or owner of a film, television, or digital animation project related to Canada you may have noticed the successful financing of your project doesn’t happen magically. ! What an understatement that is.

We can't remember when any one of our clients made the claim that film financing is ' easy ‘. The reality is, though, that if you're looking for a great partner who simply wants to provide you with 30-40% of your total production budget we know a guy. A ' guy'. Well, not really, it’s the government of Canada, and under the proper circumstances who wouldn’t want a partner like that.

The film incentives provided by the federal and provincial government in Canada total in the many million of dollars. These film tax credits can generally, as we stated, be a significant portion of your overall financing budget and challenge. Typically film funding of this type is done by independent producers as opposed to major studios, but we're quite certain the big boys use the strategy also.

Who is surprised when we say that the film industry as a whole has a risk element to it, and when you can eliminate 30-40% of that risk right out of the gate then clearly you are on to a winning strategy.
Suffice to say a good director, cast, and story complement your strategy to win!

In film financing, as any business, it’s about money and return on investment. The interesting thing about film tax credits is that your project - TV, film and animation doesn’t necessarily have to be a commercial success - (naturally it’s nice when it is).

Can film tax credits reduce the overall risk of a project - our clients certainly believe so. Naturally those other components such as marketing, additional debt and equity financing, and pre sales and distribution round out your finance plan.

So what do you need to do to maximize on the utilization of film incentives in Canada. A ton of common sense helps. You need to be able to demonstrate to the lender that you have a project that can be fully financed (debt - equity-tax credits) and how the timing of these 3 financial components works.

Simply speaking the business side of your project has to align to the marketing and technical side of your plans. How is this done, ask clients. It is done by surrounding your self with a proper film tax credit advisor and accountant, who have the experience to guide you through the process.

Although we position the tax credits sometimes as ' easy money ' that’s certainly not the message we convey. You need to clearly demonstrate a realistic budget, how you will handle over runs, and your timelines. And we remind readers that has to do with all aspects of the industry, whether it be a movie or digital animation project a la Shrek.

The Canadian government has clearly demonstrated that they have committed millions to the tax credit film funding in Canada. Your job as a recipient of film tax credit financing in Canada is to demonstrate that budgets and schedules and other committed finances will ' come together . 'Generally independent projects come together over time, and go through a predictable phase of financing , shooting, and then post production and release .

To maintain some sort of financial conservatism around that challenging timeline the industry generally requires a completion bond, which is a financial instrument that insures the project if difficulties areas of committed funds aren’t received . This type of financing bond assures your equity, debt and tax credit financier that unforeseen events will be taken care of, rather than putting your project at risk.

In summary, investigate film tax credit financing in Canada by speaking to an experienced, credible, and trusted Canadian business financing advisor. You'll be show how film funding and the financing of your credits can be achieved on both a when filed or even on an accrual basis, assisting you further in day to day cash flow on your project .

So hopefully you have seen how using our ' guy “(aka government film tax credits) can help you ace your project for financial success.
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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 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_incentives_film_tax_credits_film_funding.html

A Working Capital Breakthrough – Financing Your SR ED tax credit claims ( SR&ED ) makes Sense!

There is generally a limited number of ways to finance your company and generate working capital. Yet one of these ways is somewhat unknown to many Canadian firms who do any type of research and development under the SR ED tax credit program. And it is a pretty simple decision - finance your tax credit as soon as you have filed it!

Cash is flowing out of Canada's sr&Ed program - why not let it flow towards your company. Without a doubt this is the largest incentive for Canadian firms to fund research, because under the program you of course recover a significant portion of all you have spent, at the same time enhancing your firm’s competitiveness in its products and services.

So hopefully we have articulated to a certain degree the benefits of filing a sred claim... so how do we finance it. The answer is simply to contact a sred tax credit Canadian business financing advisor. The elements of a successful sred financing are quite simple: have your claim prepared by a sred consultant that has proper experience in your area or industry. As soon as the claim is prepared it is filed by your firm and your accountants, and you apply for a refund at the same time you file your financial statements.



Discussions with clients around sr ed , aka sr&ed research development tax credits focuses typically around two area, the actual benefits they attain from their r&d, and, as importantly the financial impact the sred cash has on their balance sheets and working capital .

So who is the sr&Ed candidate from a viewpoint of both maximizing the program, while at the same time benefiting from financing the claim? In a world, everyone, as long as you are filing. However if we had to profile the typical firm that both files and finances their sr&ed claim via a sred loan it would be a company that typically is in the technology industry and is in its early cycle of development, revenue, etc . But, that having been said many mature manufacturing or ' old economy ' type firms have been filing successfully for many years and reaping those same benefits.

So how does SRED translate into working capital in an innovative manner? It’s in the financing, or we can call it the ' monetizing ' of your claim. Think of it frankly as financing or monetizing any one of your receivables, in the same manner that you do with your bank or an independent finance firm. You are in effect ' discounting ' that receivable today to receive the benefits of cash flow and working capital now. Of your you can go to the mail box every day for the next 3-12 months and see if your sred cheque was ' in the mail ' , but why not one up your competition and finance your claim for that working capital breakthrough we are talking about it .

Think of the positive dynamics around that - you have accelerated R&D competitiveness, you have been re imbursed for those expenses under the sred program, and now you're taking that money that is non repayable - yes non repayable! And financing that claim to fund the on going growth and profits of your company.

Financing of the claim involves a very standard business application, with the focus of the sred as your collateral. You're not taking on extra debt remember, you are just monetizing your claim for cash flow.

The sred loan is a bridge type loan, and is liquidated against the final cheque from the government re your refund. In the meantime you have working capital to reduce payables, fund ongoing R&D again, or simply for any general corporate purpose. The whole process can usually be accomplished in a couple weeks. We're guessing it’s taken you that long sometimes to finance your new photocopier!

Speak to a trusted, credible and experienced business financing advisor on the benefits of cash flowing your sr&Ed claim for working capital now.
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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 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/sred_tax_credit_claims_research_and_development.html

How to Succeed When buying a franchise store and financing its cost

It's a road you want to go down successfully. We're talking about your decision on buying a franchise in Canada, financing the franchise cost and being successful in the franchise store or business you have chosen.

Clients always ask us if it’s ' risky ' to buy a franchise. Our answer is somewhat facetious, in that if a franchise fails, we prefer to have someone to blame - that's you, the franchisor, or your franchise lender. It's rarely the lender, leaving you and the franchisor.

The reality is quite frankly the same as if you were acquiring any business, namely, Do your homework! And invest some time in solid due diligence. Make a good decision around who you are going to do business with.

After selecting a franchise opportunity the challenge of financing the business becomes even more bewildering to some of our clients. Let’s share some solid tips, info and suggestions around the successful financing of your franchise cost.

We often focus solely around your own financing challenge when buying a franchise ; we should add that its just as important to spend some time on understanding the general financing situation around the partnership you are about to enter into with your franchisor . Disclosure documents these days are fairly heavily weighted towards you as the franchisee understanding that you are entering into business with, so we encourage all clients to take a strong look at your franchisors profitability, its financial management, and any items of public record that might hint or portend of future problems.

Unfortunately many franchisees we talk to about franchise cost and how we will finance the franchise are under the misconception that there is 100% financing available for your new business. In Canada that is pretty well never the case, and you need to make a strong assessment of the maximum amount you can contribute to the venture from a personal equity basis. If you borrow too much and put too little in the financial folks call that being ' over leveraged'- therefore any little bumps in the economy or your ability to generate sales becomes a huge problem if you aren’t properly capitalized.

And we already know you next question, which is ' how much do I have to put in ‘. We would prefer to give you a clear final answer on that one, such as xx %, but the reality is that your own investment is tied to a couple factors... the size of the financing you require, how you will finance it, and whether initial ratio analysis will show that you meet all qualifications .

A ratio is just a ' relationship' of numbers. The two key ratios that you need to focus on in franchise financing are debt to equity, and working capital. Typically you want to have only two times more debt than your personal investment in the business, and from a working capital point of view you want to ensure you have liquid assets to cover at a minimum short term payables.

Do franchisors offer loan assistance - the answer is yes... and no. By that we mean simply that many franchisors have developed relationships with Canadian business financing advisors who assist franchisees in finalizing all aspects of the franchise cost financing - including business plan preparation, negotiations, sourcing debt, etc. You should rarely, if ever, expect the franchisor to supply direct loan financing assistance - they are selling franchises, not building a financial empire.

In Canada typical methods of financing a franchise are a BIL loan, a working capital term loan, and equpment leasing and financing.

Speak to a trusted, credible and experienced business financing advisor who will work with you to successfully finance your franchise store in a minimum amount of time with a maximum mount of success!
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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 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/buying_a_franchise_store_franchise_cost.html

One Real Way To Solve business financing challenges - Asset Backed Lending

Something that works. We all want that. And in the new business financing reality of 2010 and 2011 asset backed lending might be your new choice for Canadian business financing.

Asset based line of credit facilities are becoming more popular everyday. It is simply a newer method of lending to Canadian business with a total focus on assets. ‘Assets’. That’s the key word. So which assets are they? ask clients. Typically these include inventory, receivables machinery and equipment in your fixed assets part of the balance sheet, and in some cases real estate. In some very unique cases IP, or intellectual property, a la patents, etc can be financed.

Another new common category is tax credits, such as SR ED (SR&ED) tax credits. Tax credits are in effect receivables, money owing to you from the government that is in the form of a non repayable type grant. So monetizing that asset as soon as you can allows you to employ cash more efficiently in your business.

Our clients typically imagine inventory and receivables as being the only items they could margin for liquidity with their bank. The reality is that even inventory financing is becoming more difficult in the chartered bank environment, certainly for start up, smaller, and medium sized firms. That therefore is the main difference in an asset backed lending and working capital facility; in its simplest form it’s simply the margining of all those other assets to capture maximum liquidity.

So who is actually using these types of cash flow facilities, and why are they a very solid alternative to what is termed ' traditional' bank financing. (We’re not so sure these days that ' traditional' bank financing is as available as it used to be - what do you think?!)

The truth is that this type of Canadian business financing is an alternative to bank financing, its real, its available, and allows you to not having to consider more unpalatable options such as raising new equity and diluting your ownership.

We are all for secured bank lending... if you firm can qualify for all the lending it needs. But if you have had financial challenges then consider asset backed lending as a solid option. What are some of those ' challenges' we speak of that might not allow you get Canadian chartered bank financing... its issues such as a temporary loss, a turnaround, new ownership, balance sheet ratios and covenants that might not work for the bank, etc .
Asset based finance does not really care about all those issues - yes they are discussed, but it always comes back to ' the assets ' - and if you have them you can margin them on a daily basis for working capital and cash flow .

So whats the catch. While we feel the advantages of asset based lines of credit far outweigh the alternatives, the reality is that 95% of the time this type of financing is more expensive. It also requires more reporting on an ongoing basis, although most business owners we talk to will gladly pay more finance charges and are ok with reporting if they in fact have all the cash flow they need to grow and profit in today’s competitive environment. You can also expect a bit more due diligence on your overall asset quality when you set up the facility.

There is always a bottom line in business, and in our case today it's that an asset backed line of credit facility is a new and emerging working capital financing that provides your firm with all the liquidity to grow. Speak to a credible, experienced and trusted Canadian business financing advisor to determine if this type of working capital and credit facility benefits your firm.
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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 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/asset_backed_lending_business_financing.html

Options on Financing a business via P O Financing and Inventory financing

It's a good news / bad news situation at its classic best. Your firm has the ability to receive orders or contracts but you are challenged with restrictions or unavailability of inventory and PO (purchase order) financing. Financing a business based on assets such as inventory and orders in coming has never been more of a challenge in Canada.

When we speak to clients we advise there is no one method that seems to handle all inventory and po finance challenges. But the good news is that via a variety of effective business financing tools you can employ you are in a position to generate working capital and cash flow from these two asset categories. Let’s examine some real world strategies that have made sense for clients.

The root of the problem is simply, you have orders and contracts, but those will potentially be lost to a competitor. Conventional wisdom is that you go to your bank and ask for financing to support inventory and purchase orders. As you may have experienced, we aren’t big believers in conventional wisdom on that matter!

However, utilizing a convention purchase order funding source does allow you to purchase product and get your suppliers paid, thus facilitating you ability to deliver to your customers.

One of the main benefits that many clients don’t realize is that inventory financing and P O financing don’t necessarily require your firm to have a long or strong credit history; the focus on structuring the transaction is around the inventory being financing and the general credit worthiness of your client, who will be paying yourself or the inventory or P O financing firm

The overall process is fairly simply and easy to understand when it comes to putting the transaction together successfully. On receipt of your confirmed purchase order your supplier is paid via cash or a letter of credit. Your firm of course completes final shipment of the product, which typically involves some additional time on your firms part. On shipment and of course payment from your customer the transaction is in effect settled. In a true pure po financing scenario the P O funder is paid immediately on your invoicing of the product. That is facilitated by your firm selling the receivable via a factoring type transaction as soon as you have generated the invoice.

There are always limitations to this type of financing - so things we look for early in the transaction are the ultimate remarket ability of your product in case there is a transaction risk. Naturally, as we stated, the overall credit worthiness of your customer is key, his receipt of goods and payment in effect closes the transaction.

Inventory financing and PO financing are generally more expensive than traditional financing, due mainly to the significant transaction risk that the lender takes. Therefore we strong recommend that your firm has solid gross margins in the 25% range to cover the associated costs of a po financing, inventory financing transaction that also factors in the time it takes to get paid by your client, as that typically adds 30-60 days on to the whole cycle of the transaction.

If there is one great tip of ' secret' that we share with clients its simply that the best method of ensuring financing in the manner we have outlined is to consider an asset based line of credit . Coupled with a facility that will finance your purchase orders this is the ultimate working capital tool that will allow you to grow business quickly and significantly. This type of facility is generally a non bank facility and is offered by independent finance firms.

Speak to a trusted , credible and experienced Canadian business financing advisor who will assist you putting together a working capital and cash flow solution that works!
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http://www.7parkavenuefinancial.com/p_o_financing_inventory_financing_a_business.html

Avoiding Blunders in working capital financing and Cash flow Financing

Mistakes. As Business owners we all make them. Let's talking about wrong choices in working capital financing and how the right types of cash flow financing can turn adversity into opportunity for growth and profits.

All Canadian businesses need working capital, permanently, and in many cases, on a ' bulge' basis from time to time. In essence you are financing your operating cycle, and most business owners intuitively know their industry has a unique cycle - that being simply the time it takes for a dollar to flow through inventory, A/R, and back to cash.

Larger or established? You probably have a better chance of seeking what people refer to as ' traditional' forms of financing. Quite frankly we're not sure anymore what traditional means, as the lines are getting blurred between what some consider as non traditional working capital financing.

Maybe we're different, but we seem to meet more and more clients that are unable to access capital for growth and development. They seek to enhance working capital in a variety of methods. Those include receivable financing, aka ' factoring', asset based lines of credit, financing for purchase orders ( yes , you can finance a purchase order !) , and even monetizing hard assets into revolving facilities such as a short term bridge loan on equipment, with proceeds used for working capital and cash flow .

The bottom line is your need to focus on liquidity, so if you have positive working capital as calculated by the text books ( current assets - current liabilities ) you must therefore monetize those assets into the ' cash is king ' model .

The harsh reality is that as you textbook calculation of working capital goes up your actual cash flow is negative , given that your investments are simply tied up in inventory and receivables which seem to be collected more slowly every year in our opinion and those of our clients .

Naturally if you are able to be paid in cash at time of sale, of if inventories turn very quickly, and billed customers pay promptly ,, well suffice to say the cash flow financing pressures are eased quite a bit - but reality of business usually does not give us that luxury .

We are often amazed at how many clients we meet who are looking for proverbial ' working capital ' but are in a position of not being able to define the type of financing they think they need

The ultimate cash flow support tool is the Chartered bank operating line of credit. But many business owners who do not qualify for these facilities are moving to either a receivable financing facility or an asset based line of credit. These come at a higher cost, but provide liquidity often 100% greater than might have been achieved previously, had they been bankable.

So whats our take away tip here - simply that you must look beyond the rate and focus on what collateral you are providing to get the liquidity you need.

Ultimately you need to understand your particular need and choose a financing solution that provides you with the cash flow financing to meet your business needs, as well as grow your business. You have options, which many Canadian business owners and financial managers don’t realize. Be they traditional or alternative, one or several of them will work for your firm. Speak to a trusted, credible and experienced Canadian business financing advisor who will put you on a clear path to the solution for working capital financing.
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Stan Prokop is founder 7 Park Avenue Financial ; 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/cash_flow_financing_working_capital_financing.html

How to Acquire Equipment Finance Leasing and the Best Leasing Services and Rates

When Canadian business owners and managers are aware of the benefits of equipment finance leasing and leasing services their ability to get rates, terms and structure approvals that makes sense increase dramatically.

Equipment financing in Canada is one of the easiest methods of financing business assets bar none. However, at the same time the complexity of the different types of leasing and who offers lease financing can be a true challenge that you might not want to dedicate all your time toward.

You can obtain the best leasing services and rates by focusing in on what benefits matter to your firm from a priority basis – in many cases its simply the term and rate on the lease financing . Depending on what type of asset you are financing lease terms vary from 2 to 7 years – at the end of the day it depends on the equipments useful economic life, combined with the type of lease you structured. In Canada that is either an equipment finance lease, designating your desire for ownership, or an operating lease, designating your firm’s choice to use an asset, but not ultimately own it.
Leasing is often referred to as a cash flow enhancer – little or no money down, as well as your ability to craft monthly, quarterly, or semi annual payments with can either accelerate or decelerate as you require. That’s true cash flow management.

Equipment lease financing is all about benefits and use, not real pride of ownership. In most situations today assets depreciate... you certainly can’t look at your investment in computers and technology and make the case those assets are rising in value!

With today’s volatile finance markets, inflation, and the somewhat erratic timing of the need for your asset acquisitions isn’t it a safe bet to know that the decision process becomes much easier when leasing services provide you with an effective acquisition tool.

Clients always inevitably ask ‘why is lease financing so popular ‘? The reality is that is a triple threat to your competition. You can effectively stretch your dollars, extend your budgets, and acquire equipment and facilities with the most minimum investment of funds. That is simply because you are matching investment of your funds with the useful economic life of the asset – what else could make more sense.

Equipment finance leasing allows you to generate the payments you need to make for the asset from income produced by the asset – payments are made from current revenue and the equipment and assets you finance are in effect a ‘pay as it earns’ scenario . Today’s costs are paid with tomorrow dollars since lasing involves payment for equipment as it is used. Naturally if you chose to buy the asset outright we can make the statement that you would be using today’s dollars to hand tomorrow expenses, and we advise against that in conversations with clients.

Speak to a trusted, credible, and experienced Canadian business financing and lease advisor on how you can maximize the benefits of equipment lease financing to grow revenues and profits .
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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 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/equipment_finance_leasing_services.html