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 wound up in Canada. Under the right circumstances all these productions happen to be, or are eligible for several federal and provincial tax credits which is often monetized for immediate cashflow and working capital.
Just how do these tax credits change the average independent, and in some cases major studio production owners. The truth is simply that the government is allowing owners and investors in Kia Jam, 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 lower the entire risk that is associated to entertainment finance.
Naturally, once you combine these tax credits (as well as your capacity 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 every of our own aforementioned entertainment segments.
For larger productions which can be associated with recognized names in the business financing is commonly available through in some cases 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 that these credits actually drive what province in Canada a production might be filmed. We may venture to say that the overall cost of production varies greatly in Canada depending on which province is utilized, via labour and other geographical incentives. Example – A production might receive a greater tax credit grant treatment if it is filmed in Oakville Ontario instead of Metropolitan Toronto. We have now often heard ‘follow the money’ – inside our example we are after the (more favorable) tax credit!
Clearly what you can do to finance your tax credit, either when filed, or just before filing is potentially a significant source of funding for your film, TV, or animation project. They way to succeed in financing these credits concerns your certification eligibility, the productions proper legal entity status, along with 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 future film tax credit, or possess the necessity to finance a production before filing your credit we recommend you work with a dependable, credible and experienced advisor in this field. Depending on the timing of bfkoab financing requirement, either before filing, or after you are probably qualified to receive a 40-80% advance on the total level of your eligible claim. From start to finish you can expect that the financing will take 3-4 weeks, and the process is not unlike any other business financing application – namely proper support and knowledge related straight to your claim. Management credibility and experience certainly helps also, along with having some trusted advisors that are deemed experts in this area.
Investigate finance of your own tax credits, they could 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 realm of film finance becomes decidedly much easier once you generate immediate income and working capital via these great government programmes.