Film financing in Canada (we are including television and digital animation productions) has significantly benefited from the Canadian government’s very aggressive stance on increasing tax credits, which are non-repayable.
Unbelievably, almost 80% of U.S. productions who have gone outside the U.S. to be produced have ended up being in Canada. Underneath the right circumstances all these productions have already been, or are eligible for a number of federal and provincial tax credits which is often monetized for immediate income and working capital.
Just how do these tax credits change the average independent, and perhaps major studio production owners. The fact is simply the government is allowing owners and investors in kjammedia, television and digital animation productions to get a very significant (typically 40%) guaranteed return on the production investment. This most assuredly allows content owners of such productions to reduce the general risk that is associated with entertainment finance.
Naturally, whenever you combine these tax credits (and your ability to finance them) with owner equity, along with distribution and international revenues you clearly hold the winning potential for a success financing of your own production in any of our own aforementioned entertainment segments.
For larger productions that are connected with well known names in the market financing is usually available through in some instances 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 would venture to state that the overall cost of production varies greatly in Canada according to which province is utilized, via labour as well as other geographical incentives. Example – A production might receive a greater tax credit grant treatment when it is filmed in Oakville Ontario as opposed to Metropolitan Toronto. We now have often heard ‘follow the money’ – inside our example we have been after the (more favorable) tax credit!
Clearly what you can do to finance your tax credit, either when filed, or before filing is potentially an important source of funding for your film, TV, or animation project. They secret weapon to success in financing these credits pertains to your certification eligibility, the productions proper legal entity status, in addition to they key issue surrounding repair of proper records and financial statements.
In case you are financing your tax credit when it is filed that 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 prior to filing your credit we recommend you deal with a dependable, credible and experienced advisor in this area. Depending on the timing of bfkoab financing requirement, either before filing, or once you are probably eligible for a 40-80% advance on the total amount of your eligible claim. From start to finish you could expect the financing will require 3-four weeks, and the procedure is not unlike any other business financing application – namely proper backup and information related directly to your claim. Management credibility and experience certainly helps also, in addition to having some trusted advisors that are deemed experts in this field.
Investigate finance of your tax credits, they can province valuable income and working capital to both owner and investors, and significantly boost the overall financial viability of your project in film, TV, and digital animation. The somewhat complicated arena of film finance becomes decidedly much easier once you generate immediate cashflow and working capital via these great government programmes.