Financing Refundable Tax Credits In Canada : SRED And Film Bridge Loan Similarities

Your New Target Goal

For SR&ED And Film Tax Credits : Financing!

OVERVIEW – Information on non refundable tax credits in Canada . Why a bridge loan for your SRED or Film , television or Media project makes financial sense





Non refundable tax credits in Canada. We're told that it's good to have a ' goal ' in business, and in the case of a tax credit loan for either your ' SR&ED' or 'film/TV or animation' credit might well be to finance that claim! Let's dig in.

Although we're talking about two separate government tax credits for separate aspects of Canadian business ( 1. Research 2. Media/Entertainment) both of these claims provide your company with the recovery of valuable cash flow/capital spent.

And our premise? It's simply that if you choose to finance either of these claims you're only doing one thing: Accelerating the benefits by recouping working capital faster. Now that's a goal to aspire to, right?

Although, as stated, we're talking about two different government programs there are some very strong similarities between the two. One of those is that they are both structured around federal and provincial co-operation.

Another example of similarity is that many producers / owners of media projects can also use the SRED program to claim non refundable credits. When it comes to the SR&ED (acronym for ' Scientific Research + Experimental Development ‘) credit any media project in any of the genres of film, TV and animation can file a claim around innovation they might have developed and spent capital on in areas of assets for film and TV (i.e. cameras, etc) or software in the evolving area of 3D as an example.

When it comes to Media tax credits many owners or co-owners of productions are in fact partially non Canadian in nature. A large majority of these productions are eligible for SR&ED and Film credits because they have an aspect of Canadian ownership, and are often domiciled under a legal Canadian special purpose entity , therefore becoming eligible for the ' SPEND' they make in Canada relative to the specific qualification of either of our two tax credits in question .

It therefore can't be a surprise that our proud Canadian nickname of ' HOLLYWOOD NORTH' continues to gain traction based on several underpinning fundamentals - a strong economy, robust tax credits a diverse geography and talent pool.

In Canada the federal and provincial governments allocate Billions of dollars every year to both programs, funding thousands of projects in either SR&ED research/innovation or film, television and the fast emerging Transmedia industry. In the case of the SRED program only privately owned (i.e. not public companies) are eligible to claim. The big guys seem to have their share of other benefits, right?

Speaking in broad terms both programs can generally deliver a non refundable tax credit claim for your project in the 30-50% range. Again those are common claim amounts, but vary from a technical term based on which tax credit it is, what province it originates in.

Both claims are typically prepared by an expert in either claim:

SR&ED = Sred Consultant
FILM/TV/ANIMATION= tax credit accountant

Have we forgotten anything? We almost did. It's why business owners, financial managers, and production owners should consider financing your claim. It's simply all about accelerating cash flow.

Once again similarities arise. Credits are financed via bridge loans - no payments are made for the duration of the loan, and financing costs are deducted from the final claim cheque that comes from the government. Broadly speaking claims of non refundable tax credits are financed at 70% of their value, providing valuable cash flow and working capital for companies (SR&ED) or Producer/owners (FILM.

Check out the benefits and ' next steps' in financing your tax credit by seeking and speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan 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/non-refundable-tax-credits-loan-sred-film.html







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

Phone = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

The Purchase Of a Distressed Business In Canada. Eliminating The Worst Days Of The Acquisition Of A Troubled Company

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Everything You Didn’t Notice When You Purchased A Distressed Business

OVERVIEW – Information on buying a distressed business in Canada. The acquisition and purchase of a troubled company is a daunting business challenge





Buying A distressed business in Canada. It's a phone call we've received a few times over the years - a clients earnest desire for the acquisition / purchase of a troubled company that... guess what... comes at a great deal and price!

Hindsight will often tell the business owner certain things weren't noticed in that whole process, creating some tremendous challenges for the new owner/manager. Let's dig in.

Opportunities in distressed business turnaround and acquisition come out of several areas. One is simply that in some ways we are still not over the economic crisis of 2008 and many businesses, small and larger are still affected in certain ways - bottom line, they are distressed. In other cases companies have in some cases ‘ lost their way ‘.

That presents a tremendous opportunity for a savvy buyer. In some cases it might be a direct purchase; in others it might mean a merger scenario.

The benefits of a successful acquisition of a troubled company are obvious - they often include a solid return on investment and assets, the ability to enter new markets, and also to acquire assets at what some might deem a fire sale price.

In many cases the business purchaser has the ability to remove the debt burden of the original target firm - either through legal or informal means- i.e. negotiation with creditors, suppliers, etc.

So where are some of the areas where things can go really wrong in buying that distressed business? Part of the problem can simply be the purchaser loses focus of the original intent of the acquisition as things get tangled up in negotiations, business cultures, etc.

In all cases it's important to determine there is no legal ' hangovers' in the target business , issues such as existing liens, contracts that were in place, lender agreements, lawsuits, etc.

When it comes to the assets of the business in question it in fact might be very prudent to allow certain assets, inventories, etc to remain with the current owner. But don't forget that those supplier /vendor relationships that were in place are critical to the ongoing success of any company.

Don't forget also that the ability to keep key personnel in the target firm is a valuable consideration, however that presents a big challenge when the business was in fact under duress and may have lost confidence in the business.

In Canada you can of course legally buy a business that’s already in receivership or bankruptcy or CCAA proceedings, however this has sometimes a larger cost and other legal obligations.

The right type of financing is available for all types of distressed business acquisitions. Financing and acquiring a troubled company can be achieved with bank term loans, asset based lending, mezzanine financing, etc.

If you're looking to eliminate the ' bad times' in the acquisition of a troubled company seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with ' noticing' the areas that will make or break success.



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/distressed-business-acquisition-purchase.html





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

Phone = 905 829 2653


Email = sprokop@7parkavenuefinancial.com

Stan Prokop

The Secured Business Credit Line Is Sometimes More Difficult Than Negotiating With A Pirate : Finance Accessibility Made Simpler

Wasting Time On Acquiring A Business Line Of Credit ?

Here’s Why!



OVERVIEW – Information on the secured business line of credit in Canada . Financing solutions for your business must include day to day working capital solutions



A secured line of credit is almost always a necessity in business finance in Canada. A lot of clients we meet either are chasing a facility they don't qualify for, or in some cases simply don't understand the alternatives. We're pretty sure we can lend some clarity to the matter.

Credit lines in the business environment are a combination of:

Necessity

Opportunity


Uses for commercial lines of credit include expanding your business, funding daily operations, or simply giving the business owner/ financial manager some ' de-stressing’, knowing they have the liquidity they need if it’s required.

It's equally important not to use credit lines for the wrong thing - in finance that’s called ' matching' of debt and assets. For instance, you would not use your credit line to a maximum amount to purchase a fixed asset. You would be in a bad position pretty quickly as liquidity dried up while the asset in question is actually meant to provide your firm with its use for years. In that case the asset should be acquired via a term loan or equipment lease financing, as an example.

The concept of the business credit line is simple. It involves two things - fluctuations, and paying only for what you are using on the facility. Your bank or commercial lender likes fluctuations. That reflects the ebb and flow of your business as items are purchased, receivables are collected, etc.

The advantages of access to such a revolving facility include rates that match your firm’s credit quality, the flexibility of paying down the facility as your cash flow allows, and the ability to leverage up the facility if your sales and financial statements can be validated.

As we have noted, the alternatives to business borrowing typically are term loans, lease financing, etc.

A lot of the needs around 'LOC ' borrowing revolve around the seasonality or bulges in your business. Your ability to do a bit of reasonable forecasting is key when it comes to applying for the facility as you are required to demonstrated that the facility fills the gaps between cash outflow and cash inflow!

Start ups or early stage companies in Canada have a tough, if not impossible time to get a business secured credit line. The security for the facility is typically the owners’ personal guarantee, as well as a charge or lien against assets such as A/R, inventory, and equipment. That’s typically collateralized by a General Security Agreement on all the assets in your business.

If your business is start up/early stage and can't produce a couple years of financials you will find that the whole process is tougher than negotiating with a pirate,

which Tom Hanks told us is quite a challenge.

So, alternatives? They include:

Receivable Financing
Inventory Finance
Non Bank asset based lending
PO Financing
Tax Credit Monetization

Don't waste time barking up the wrong tree (financial institutions?) when it comes to business finance needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your working capital and cash flow 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/secured-line-of-credit-business-finance.html





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
Phone = 905 829 2653

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Stan Prokop

The Emperor Has No Clothes - Please distribute to all direct reports !

Getting a sick feeling happens to often in Canadian business under all sorts of circumstances .We go that sick feeling the other day when reading Barry Critchley's column in the FINANCIAL POST .

We've included a link to that article below

We're strong fans of Critchley's regular columns which often seems to cover some of the underbelly of whats happening in Canadian business.. good and bad .

Anyway, the gist of the article. It takes us back to circa 2008.. think back to that time in business, as the world basically ended when it came to worldwide economic implosion , bank failures, commercial financing failures , and oh yes.. have we forgotten anything .. yes .. our RRSP took 40-50% hits forcing us to spend the last 7 years crawling back to breakeven.

Enter the government in the form of JIM FLAHERTY setting up the ' emergency ' ( key word = emergency ) 12 Billion ( that's billion with a B ) CANADIAN SECURITIZATION AND LOAN FACILITY .

Our reaction at the time . We were overjoyed .. It was a classic ' I'm from the government and here to help '.

What could possibly go wrong with such a great government funding program?

As our business was, and still is financing origination for Canadian business we recall vividly banks stopping lending, commercial mortgages drying up, lease companies having their credit facilities stopped, and commercial finance companies exiting industries or simply closing down. Bottom line , it was ugly .

So here was the Canadian government coming in to also help out clients .

So, back to Mr Critchleys article . What did the government do with that 12 Billion . Did they lend it to the thousands of firms that saw their credit line facilities disappear, or find that their access to capital simply: GONE .

They didnt. Instead they appointed the BDC who did a handful of loans in the several hundred million dollar range to companies such as GMAC/GM Nissan, and CNH INDUSTRIAL . Apparently about 5 loans in total, all to companies that had revenues in the hundreds of millions or billions. CNH we believe is a Dutch company, so surely we all see the wisdom of helping a DUTCH subsidiary company as the world around us implodes? Who wouldn't buy into that?

Naturally that left our clients in the dust , with many companies failing, restructuring, having to merge, etc, etc


And the BDC /GOVERNMENT take? ' We consider the program a great success ' said Paula Cruickshank.

Who doesn't love a braggart in Business. We all do, don't we?????






The essence of Critchely's article was that the program made back all its money, and then some in profit based on those five loans.

It's easy to get sick on many aspects of Canadian business . This was an all time low and we say ' shame' on the government and BDC for bragging about making those 5 loans to the likes of GM, NISSAN, and some other misc. asset backed securities deals . So while the EMPEROR marched up BAY STREET touting loans for Canadian business in 2008 we offer that THE EMPEROR IN FACT HAD NO NEW CLOTHES,

We work on Main street everyday, not Bay Street and we hope someday , one day that the little guy will get the consideration he or she deserves without having to watch the action at the trough .

Here is the original link to the article we've discussed:



NATIONAL POST ARTICLE : CLICK HERE -> Credit Crisis










WHO IS STAN PROKOP ?

Stan has been acknowledged as a Business Financing expert by the FINANCIAL POST as well as the GLOBE & MAIL . He founded 7 Park Avenue Financial which has provided over 90 Million dollars of financing facilities to the SME sector in Canada . The firm specializes in receivable financing, equipment financing, banking facilities, Asset based business credit, and tax credit financing in the areas of SR&ED and Film . The company regularly receives referrals from Canadian banks, insurance companies, commercial financing companies based on its proven expertise with over 400 financings completed to date.

CANADIAN BUSINESS FINANCING

Franchise Finance Funding In Canada : No Hiding Here When It Comes To Franchisee Financing Basics

Welcome to Franchise Loan Boot Camp!

OVERVIEW – Information on franchise financing basics in Canada. How does the entrepreneur achieve successful franchisee finance solutions when entertaining the purchase of a new or existing franchise



Franchise financing basics in Canada. Is there a ' boot camp ' we might be able to attend to learn more about ‘successful’ franchisee finance solutions in Canada. We're giving you free admission, so let's dig in!

Boot camp. It's really a place where people go to learn some basic skills we're told, and so it’s a good analogy for the Canadian entrepreneur and would be franchisee searching for financing options for their business.

While our great Canadian banks have some great commercials and websites around franchisee financing support in Canada in fact it's very rare they would finance a tier 2 or tier 3 franchise directly - so, so much for that commercial! They are very quick; we would point out, to finance the tier one franchises that are huge ' brands' with very limited chance of business failure. (HINT - Think hockey player/donuts or Clown/hamburgers... ' Billions served').

So what then must the franchisee do to locate the appropriate financing for a new turnkey or existing franchise? Franchises can be purchased and financed when they exist already because the franchisor is converting a corporate store to a franchise, or an existing franchisee has permission to sell the business to you. Another Hint - Don't forget to check out why he or she is selling!

So it's back to our entrepreneur searching for the franchise loan that makes sense for their business. Some key fundamentals need to be in place to source the small handful of financing solutions available in Canada in this industry. By the way, they are great solutions; they are just limited so you as a franchisee have to know what they are and who offers them.

Prior to entering the door

to franchise lending a few fundamentals must be in place. The entrepreneur/business person must ensure they have a reasonable personal credit rating as well as the resources to muster a down payment or equity contribution in the business. That ranges from anywhere from 10-50% based on the type of franchise you are buying, the amount of financing you need, the perceived risk in the transaction , or simply the requirement that certain franchisors place on franchisee equity contributions.

While sometimes the franchisee might feel that the down payment requested is onerous it's often driven by the franchisors experience in the amount of capital required to make a franchise successful. Certain industries carry a lot more risk than others from the lenders and franchisors perspective - a good example is hospitality.

We see a lot of clients initially spending all their time focusing on getting initial financing for their franchise, often forgetting that down the road they will need working capital, new assets, and potentially leasehold refurbishment to stay competitive.

Don’t forget also you absolutely must have a solid business plan, cash flow forecast, and some level of management or business experienced related to your new venture.

Have we forgotten anything? Oh yes, its actual franchise finance solutions!! They include the one or two specialty franchise finance firms that provide turnkey financing. The other popular, and more attainable solutions is utilizing the Govt small business loan which is perfected suited to franchisee finance as it covers assets and leaseholds required to get your business going.

That’s the boot camp overview. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with franchise financing basics that makes sense to achieve successful entrepreneurship in the Canadian franchise industry which is such a key part of our economy these days.




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 :


7 Park Avenue Financial = Franchise Loan 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

Phone = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Stan Prokop

Is Working Capital Management Via Business Credit Solutions Imaginary In Your Company ?

Turning Working Capital Challenges Into Opportunities ? One Guarantee You Won’t Like At All !

OVERVIEW – Information on working capital management for Canadian businesses. Addressing the need of business credit in the financing landscape of Canadian businesses





Business credit challenges in Canada often revolve around your firms overall working capital management. How you address improvements in cash flow management via internal management and external financing solutions makes and breaks a business in Canada.

If you're in the SME ( small to medium enterprise) commercial sector in that's often even more of a challenge, as the big guys seems to have solutions and access to capital crawling all over them . We wish! Does that have to always be the case? We don't think so, let's dig in!

A lot of the cash flow needs in a business are in fact ' hiding' in your financials - it's your job to identify and fix them. While a healthy amount of clients we meet seem to initially only be focusing on revenue / sales management often the root of the problem is in your current asset accounts - i.e. inventory and receivables.

So it's the job of the business owner / financial manager to identify those root causes and implement improvement. In the case of A/R it’s all about a sound credit granting policy and collection of accounts - if your company is growing that is even more important as your inventory and A/R ' eat' cash! So addressing solutions for the ' appetite' we've just spoken of are simply critical to business survival.

In cash flow and working capital management its all about current assets and liabilities. Liabilities? Didn’t we just say that it’s all about the A/R and inventory? We did of course, but its easy for the business owner/manager to forget that effective management of payables stops cash outflows, and the more you get your key vendors and suppliers on side is a classic win/win.

How you finance your A/R and inventory ties directly into your overall access to business credit for growth.

So that's why taking some time to understand some key terms such as your cash operating cycle is in our opinion a million dollar investment of your time. Simply speaking it’s the time it takes for a dollar to flow through your business.

When it comes to assessing external business credit solutions its all about flexibility and cost.

The solutions around working capital credit come from a small handful of external financing solutions

They include:

Canadian chartered bank credit lines
Receivable Financing... aka ' Factoring'
Inventory Financing
Asset based non bank lines of credit (they combine A/R, inventory and equipment into one credit facility)
Tax credit monetization - i.e. bridge loans for SR&ED claims
PO/Supply chain financing

Which one/ones are right for your business?

Any one or a combination of these solutions delivers cash flow. They come with different costs, they operate differently on a daily operational basis, and in some cases are limiting and in other cases (Asset based credit lines) offer unlimited growth financing potential

Looking for an iron clad guarantee in business credit. Here's one. We guarantee if you don't manage and finance your current assets properly you'll be out of business fairly quickly.

Probably not the guarantee you were looking for? Instead, consider seeking a trusted, credible and experienced Canadian business financing advisor who can assist you with working capital management solutions.


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 :


7 Park Avenue Financial = Working Capital Management Financing Solutions







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

Phone = 905 829 2653



Email = sprokop@7parkavenuefinancial.com

Stan Prokop

Canadian Business Loans : On Your To Do List For Accessing Financing Options?

Feeling Lost Out On Loan And Finance Options In Canada?


OVERVIEW – Information on access to Canadian business loans in Canada. Commercial financing options are not just available from our banks



Canadian business loans and financing options are often very near the top of the business owner/financial manager’s TO DO list when it comes to running and growing the business. It can be also said that it’s often common for the owner/manager in the SME sector to feel ' lost ' when it comes to achieving those finance goals. Has to be the case? Not really... let's dig in.

By now pretty well everyone seems to recognize that the SME (small to medium enterprise) sector in Canada is one of the constant powerhouses of the economy. Everyone seems to have a different definition of what this sector is; some maintain its, for example, companies with under several hundred employees and sales of 20 Million as an example. That's not that SME to us! , but less focus on the solutions available to finance those firms.

The one thing everyone does seem to agree on though is that ' size counts ' in business financing and the small to medium guy has a lot more of a challenge in accessing. More often than not it feels like an obstacle course, as the owner /manager finds it very difficult to obtain long term financing options that will help secure business growth.

On occasion it might help to put yourself in the shoes of the bank or the many commercial lenders that offer financing solutions to Canadian business. Lenders focus on key items such as tangible equity, assets, and in many instances outside collateral.

Canadian chartered banks in Canada are often the ' point person' when business financing discussions come up. While often criticized for providing the financing business needs they do participate positively in a number of ways.

Banks typically provide:

Govt Guaranteed Business Loans
Very Small Loans
Small overdrafts
Mortgages

They are successful because they are on every corner, have very clear rules and borrowing applications, and can be a source of constant contact with the owner/manager.

While bank solutions are low cost and accessible its in fact commercial finance firms that provide a lot of the other financing options that will get your company to the goal line. Commercial finance firms generally aren't regulated, take more risk, and are profit motivated. Additionally they provide options simply not available from the banks.

Those options:

Receivable Finance
Inventory Financing
Non bank business credit lines
Asset Leasing/ sale leasebacks
Purchase Order Financing
SR&ED Tax Credit Cash Flow Loans
Unsecured Cash Flow Loans
Franchise Financing

Whether its bank financing or non bank commercial finance options the SME borrower doesn't have to feel lost

when it comes to financing options that suit their needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your operational and growth goals.











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/canadian-business-loans-financing-options.html




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

Phone = 905 829 2653



Email = sprokop@7parkavenuefinancial.com

Stan Prokop