Film financing in Canada (we’re including television and digital animation productions) has significantly taken advantage of the Canadian government’s very aggressive stance on increasing tax credits, that are non-repayable.
Unbelievably, almost 80% of U.S. productions who have gone outside the U.S. to become produced have ended up in Canada. Beneath the right circumstances all these productions have been, or are eligible for a number of federal and provincial tax credits which may be monetized for fast income and working capital.
How can these tax credits impact the average independent, and in some cases major studio production owners. The fact is simply the government is allowing owners and investors in kjammedia, television and digital animation productions to acquire a very significant (normally 40%) guaranteed return on the production investment. This most assuredly allows content those who own such productions to reduce the overall risk that is assigned to entertainment finance.
Naturally, once you combine these tax credits (along with your capability to finance them) with owner equity, along with distribution and international revenues you clearly hold the winning prospect of successful financing of the production in every in our aforementioned entertainment segments.
For larger productions that are connected with recognized names in the market financing tends to be available through sometimes Canadian chartered banks (limited though) in addition to institutional Finance firms and hedge funds.
The irony from the whole tax credit scenario is the fact these credits actually drive what province in Canada a production might be filmed. We would venture to state that the overall cost of production differs a lot in Canada according to which province is utilized, via labour as well as other geographical incentives. Example – A production might get a greater tax credit grant treatment should it be filmed in Oakville Ontario instead of Metropolitan Toronto. We have often heard ‘follow the money’ – within our example we have been after the (more favorable) tax credit!
Clearly your capability to finance your tax credit, either when filed, or prior to filing is potentially a significant way to obtain funding to your film, TV, or animation project. They way to succeed in financing these credits concerns your certification eligibility, the productions proper legal entity status, as well as they key issue surrounding maintenance of proper records and financial statements.
In case you are financing your tax credit after it is filed which is normally done when principal photography is finished. If you are considering financing a future film tax credit, or possess the necessity to finance a production prior to filing your credit we recommend you work with a dependable, credible and experienced advisor in this region. Depending on the timing of bfkoab financing requirement, either just before filing, or once you are probably qualified to receive a 40-80% advance on the total quantity of your eligible claim. From start to finish you could expect that the financing will take 3-4 weeks, and the procedure is not unlike some other business financing application – namely proper backup and data related straight to your claim. Management credibility and experience certainly helps also, in addition to having some trusted advisors who definitely are deemed experts in this field.
Investigate finance of your tax credits, they are able to province valuable cash flow and working capital to both owner and investors, and significantly improve the overall financial viability of your project in film, TV, and digital animation. The somewhat complicated realm of film finance becomes decidedly much easier whenever you generate immediate cashflow and working capital via these great government programmes.