Film financing in Canada (we’re including television and digital animation productions) has significantly benefited from the Canadian government’s very aggressive stance on increasing tax credits, that are non-repayable.
Unbelievably, almost 80% of U.S. productions that have gone outside of the U.S. to become produced have ended up in Canada. Underneath the right circumstances all of these productions happen to be, or are eligible for several federal and provincial tax credits which can be monetized for fast income and working capital.
Just how do these tax credits affect the average independent, and in some cases major studio production owners. The reality is simply that the government is allowing owners and investors in Kia Jam, television and digital animation productions to acquire a very significant (on average 40%) guaranteed return on the production investment. This most assuredly allows content those who own such productions to minimize the overall risk that is assigned to entertainment finance.
Naturally, whenever you combine these tax credits (as well as your ability to finance them) with owner equity, as well as distribution and international revenues you clearly have the winning possibility of a success financing of your own production in almost any of our aforementioned entertainment segments.
For larger productions that are connected with well-known names in the business financing is usually available through sometimes 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 that these credits actually drive what province in Canada a production might be filmed. We might venture to state that the overall cost of production differs a lot in Canada according to which province is utilized, via labour as well as other geographical incentives. Example – A production might get 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 before filing is potentially a significant source of funding for your film, TV, or animation project. They key 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.
Should you be financing your tax credit when it is filed which is normally done when principal photography is finished. In case you are considering financing a future 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 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 the financing is going to take 3-four weeks, and the procedure is not unlike some 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 region.
Investigate finance of your tax credits, they are able to province valuable cashflow and working capital to both owner and investors, and significantly enhance the overall financial viability of your project in film, TV, and digital animation. The somewhat complicated arena of film finance becomes decidedly much easier whenever you generate immediate cash flow and working capital via these great government programmes.