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 away from the U.S. to get produced have ended up in Canada. Beneath the right circumstances all of these productions happen to be, or are eligible for many federal and provincial tax credits which may be monetized for immediate cashflow and working capital.
How can these tax credits impact the average independent, and in some cases major studio production owners. The reality is simply that the government is allowing owners and investors in themoviedb, television and digital animation productions to acquire a very significant (typically 40%) guaranteed return on the production investment. This most assuredly allows content owners of such productions to lower the entire risk that is associated with entertainment finance.
Naturally, whenever you combine these tax credits (as well as your ability to finance them) with owner equity, along with distribution and international revenues you clearly hold the winning possibility of successful financing of your production in any of our own aforementioned entertainment segments.
For larger productions which can be associated with well-known names in the market financing tends to be available through in some instances Canadian chartered banks (limited though) in addition to institutional Finance firms and hedge funds.
The irony in the whole tax credit scenario is the fact these credits actually drive what province in Canada a production could be filmed. We would venture to state that the overall cost of production varies greatly in Canada based on which province is employed, via labour as well as other geographical incentives. Example – A production might obtain a greater tax credit grant treatment when it is filmed in Oakville Ontario rather than Metropolitan Toronto. We have now often heard ‘follow the money’ – in our example we have been following the (more favorable) tax credit!
Clearly your ability to finance your tax credit, either when filed, or prior to filing is potentially a significant supply of funding for your film, TV, or animation project. They secret weapon to success 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.
In case you are financing your tax credit after it is filed that is normally done when principal photography is completed. If you are considering financing a potential film tax credit, or have the necessity to finance a production just before filing your credit we recommend you work with a reliable, credible and experienced advisor in this area. Depending on the timing of bfkoab financing requirement, either prior to filing, or after you are probably eligible for a 40-80% advance on the total level of your eligible claim. From beginning to end you could expect that this financing will require 3-four weeks, and the process is not unlike every other business financing application – namely proper support and knowledge related directly 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 own tax credits, they are able to province valuable income and working capital to both owner and investors, and significantly enhance the overall financial viability of the project in film, TV, and digital animation. The somewhat complicated world of film finance becomes decidedly less complicated whenever you generate immediate cash flow and working capital via these great government programmes.