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 who have gone away from the U.S. to be produced have ended up being in Canada. Beneath the right circumstances each one of these productions have been, or are eligible for several federal and provincial tax credits which can be monetized for immediate cash flow and working capital.
How can these tax credits affect the average independent, and in many cases major studio production owners. The fact is simply that the government is allowing owners and investors in themoviedb.org, television and digital animation productions to acquire a very significant (on average 40%) guaranteed return on the production investment. This most assuredly allows content owners of such productions to lower the entire risk that is associated to entertainment finance.
Naturally, once you combine these tax credits (as well as your ability to finance them) with owner equity, along with distribution and international revenues you clearly have the winning possibility of a success financing of your production in almost any in our aforementioned entertainment segments.
For larger productions which are associated with well-known names in the business financing tends to be available through in some instances Canadian chartered banks (limited though) in addition to institutional Finance firms and hedge funds.
The irony from the whole tax credit scenario is the fact these credits actually drive what province in Canada a production could be filmed. We would venture to express that the total cost of production differs a lot in Canada according to 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’ – in our example we are following 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 key to success in financing these credits concerns your certification eligibility, the productions proper legal entity status, in addition to they key issue surrounding maintenance of proper records and financial statements.
In case you are financing your tax credit after it is filed which is normally done when principal photography is completed. If you are considering financing a future film tax credit, or have the necessity to finance a production just before filing your credit we recommend you work with a dependable, credible and experienced advisor in this area. Depending on the timing of bfkoab financing requirement, either just before filing, or once you are probably qualified for a 40-80% advance on the total level of your eligible claim. From beginning to end you may expect the financing is going to take 3-4 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 who definitely are deemed experts in this region.
Investigate finance of your own tax credits, they can province valuable income and working capital to both owner and investors, and significantly improve the overall financial viability of your own project in film, TV, and digital animation. The somewhat complicated world of film finance becomes decidedly much easier once you generate immediate cashflow and working capital via these great government programmes.