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, 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 each one of these productions happen to be, or are eligible for several federal and provincial tax credits which is often monetized for immediate income and working capital.
Just how do these tax credits impact the average independent, and in many 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 obtain a very significant (typically 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 with entertainment finance.
Naturally, whenever you combine these tax credits (and your capability to finance them) with owner equity, as well as distribution and international revenues you clearly possess the winning prospect of a success financing of your own production in every in our aforementioned entertainment segments.
For larger productions that are related to well known names in the business financing is usually 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 might be filmed. We would venture to say that the overall cost of production varies greatly in Canada based on which province is used, via labour as well as other geographical incentives. Example – A production might obtain a greater tax credit grant treatment when it is filmed in Oakville Ontario instead of Metropolitan Toronto. We have now often heard ‘follow the money’ – in our example our company is pursuing the (more favorable) tax credit!
Clearly your ability to finance your tax credit, either when filed, or prior to filing is potentially a major 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, in addition to they key issue surrounding upkeep of proper records and financial statements.
If you are financing your tax credit when it is filed that is certainly normally done when principal photography is done. In case you are considering financing a future film tax credit, or possess the necessity to finance a production just 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 prior to filing, or after you are probably qualified for 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 procedure is not unlike some other business financing application – namely proper back up and information related right to your claim. Management credibility and experience certainly helps also, in addition to having some trusted advisors that are deemed experts in this area.
Investigate finance of the tax credits, they are able to 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 realm of film finance becomes decidedly much easier once you generate immediate income and working capital via these great government programmes.