Film financing in Canada (we are 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 that have gone outside of the U.S. to become produced have ended up being in Canada. Under the right circumstances all of these productions have been, or qualify for a number of federal and provincial tax credits which can be monetized for immediate income and working capital.
Just how do 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 obtain a very significant (typically 40%) guaranteed return on the production investment. This most assuredly allows content people who own such productions to lower the entire risk that is associated to entertainment finance.
Naturally, when you combine these tax credits (and your capacity to finance them) with owner equity, along with distribution and international revenues you clearly hold the winning possibility of a success financing of your own production in every of our own aforementioned entertainment segments.
For larger productions which are related to well-known names in the industry financing is commonly available through in some cases Canadian chartered banks (limited though) in addition to institutional Finance firms and hedge funds.
The irony of the whole tax credit scenario is the fact that these credits actually drive what province in Canada a production may be filmed. We may venture to state that the total cost of production differs a lot in Canada depending on 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 as opposed to Metropolitan Toronto. We now have often heard ‘follow the money’ – in our example we have been pursuing the (more favorable) tax credit!
Clearly what you can do to finance your tax credit, either when filed, or prior to filing is potentially an important source of funding for your film, TV, or animation project. They way to succeed in financing these credits pertains to your certification eligibility, the productions proper legal entity status, along with they key issue surrounding maintenance of proper records and financial statements.
If you are financing your tax credit when it is filed that is normally done when principal photography is finished. Should you be considering financing a future film tax credit, or have the necessity to finance a production prior to 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 once you are probably qualified to receive a 40-80% advance on the total quantity of your eligible claim. From start to finish you may expect the financing is going to take 3-four weeks, and the process is not unlike any other business financing application – namely proper backup and knowledge related directly to your claim. Management credibility and experience certainly helps also, along with having some trusted advisors that are deemed experts in this region.
Investigate finance of your tax credits, they can province valuable income and working capital to both owner and investors, and significantly improve the overall financial viability of the project in film, TV, and digital animation. The somewhat complicated arena of film finance becomes decidedly much easier when you generate immediate cash flow and working capital via these great government programmes.