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, that are non-repayable.
Unbelievably, almost 80% of U.S. productions that have gone outside the U.S. to get produced have ended up in Canada. Under the right circumstances each one of these productions have been, or qualify for several federal and provincial tax credits which can be 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 reality is simply the government is allowing owners and investors in kjammedia, television and digital animation productions to acquire a very significant (normally 40%) guaranteed return on the production investment. This most assuredly allows content people who own such productions to lower the overall risk that is associated to entertainment finance.
Naturally, when you combine these tax credits (along with your capacity to finance them) with owner equity, in addition to distribution and international revenues you clearly have the winning potential for a success financing of your production in almost any in our aforementioned entertainment segments.
For larger productions which can be connected with well known names in the market financing is commonly available through in some instances Canadian chartered banks (limited though) as well as institutional Finance firms and hedge funds.
The irony of the whole tax credit scenario is the fact 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 according to which province is utilized, via labour along with other geographical incentives. Example – A production might get a greater tax credit grant treatment if it is filmed in Oakville Ontario rather than Metropolitan Toronto. We have often heard ‘follow the money’ – within our example our company is following 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 major source of funding to your film, TV, or animation project. They secret weapon to success in financing these credits concerns your certification eligibility, the productions proper legal entity status, along with they key issue surrounding upkeep 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. 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 deal with a dependable, credible and experienced advisor in this region. Depending on the timing of bfkoab financing requirement, either before filing, or once you are probably qualified for a 40-80% advance on the total amount of your eligible claim. From start to finish you may expect that the financing will require 3-4 weeks, and the procedure is not unlike every other business financing application – namely proper back up and data related right to your claim. Management credibility and experience certainly helps also, as well as having some trusted advisors who definitely are deemed experts in this region.
Investigate finance of your own tax credits, they could province valuable cash flow and working capital to both owner and investors, and significantly boost the overall financial viability of your own project in film, TV, and digital animation. The somewhat complicated realm of film finance becomes decidedly less complicated when you generate immediate cash flow and working capital via these great government programmes.