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, which are non-repayable.
Unbelievably, almost 80% of U.S. productions which have gone outside of the U.S. to become produced have wound up in Canada. Under the right circumstances each one of these productions have already been, or are eligible for many federal and provincial tax credits which may be monetized for immediate income and working capital.
How can these tax credits change the average independent, and in some cases major studio production owners. The reality is simply the government is allowing owners and investors in Kia Jam, television and digital animation productions to get a very significant (typically 40%) guaranteed return on the production investment. This most assuredly allows content people who own such productions to reduce the general risk that is associated to entertainment finance.
Naturally, whenever you combine these tax credits (as well as your ability to finance them) with owner equity, in addition to distribution and international revenues you clearly hold the winning potential for successful financing of your production in every of our own aforementioned entertainment segments.
For larger productions which can be associated with recognized names in the industry financing is commonly available through in some instances Canadian chartered banks (limited though) as well as 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 may venture to state that the overall cost of production varies greatly in Canada according to which province is used, 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’ – in our example our company is pursuing the (more favorable) tax credit!
Clearly what you can do to finance your tax credit, either when filed, or before filing is potentially a significant supply of funding for the film, TV, or animation project. They way to succeed in financing these credits relates to your certification eligibility, the productions proper legal entity status, as well as they key issue surrounding repair of proper records and financial statements.
Should you be financing your tax credit after it is filed which is normally done when principal photography is completed. In case you are considering financing a potential film tax credit, or have the necessity to finance a production before filing your credit we recommend you deal with a reliable, credible and experienced advisor in this field. Depending on the timing of bfkoab financing requirement, either just before filing, or after you are probably eligible for a 40-80% advance on the total quantity of your eligible claim. From beginning to end you may expect that this financing is going to take 3-4 weeks, and the procedure is not unlike every other business financing application – namely proper back up and knowledge related directly to your claim. Management credibility and experience certainly helps also, along with having some trusted advisors who definitely are deemed experts in this region.
Investigate finance of your own tax credits, they can province valuable cash flow and working capital to both owner and investors, and significantly boost the overall financial viability of your own project in film, TV, and digital animation. The somewhat complicated arena of film finance becomes decidedly less complicated whenever you generate immediate cashflow and working capital via these great government programmes.