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 which have gone outside of the U.S. to be produced have ended up being in Canada. Beneath the right circumstances all these productions have already been, or are eligible for many federal and provincial tax credits which may be monetized for immediate cash flow and working capital.
How can these tax credits change the average independent, and perhaps major studio production owners. The reality is simply that this government is allowing owners and investors in themoviedb, television and digital animation productions to acquire a very significant (normally 40%) guaranteed return on the production investment. This most assuredly allows content owners of such productions to lower the general risk that is associated to entertainment finance.
Naturally, when you combine these tax credits (along with your ability to finance them) with owner equity, as well as distribution and international revenues you clearly possess the winning potential for successful financing of your production in every of our own aforementioned entertainment segments.
For larger productions that are related to well known names in the industry financing tends to be available through in some instances 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 may be filmed. We would venture to state that the total cost of production varies greatly in Canada depending on which province is employed, 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 as opposed to Metropolitan Toronto. We have often heard ‘follow the money’ – inside our example our company is following the (more favorable) tax credit!
Clearly your ability to finance your tax credit, either when filed, or prior to filing is potentially a major supply 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.
In case you are financing your tax credit after it is filed that is certainly normally done when principal photography is done. Should you be 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 prior to filing, or after you are probably qualified to receive a 40-80% advance on the total quantity of your eligible claim. From start to finish you could expect that this financing will require 3-4 weeks, and the procedure is not unlike every other business financing application – namely proper backup and data related right to your claim. Management credibility and experience certainly helps also, along with having some trusted advisors who definitely are deemed experts in this field.
Investigate finance of your tax credits, they can province valuable cashflow 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 less complicated once you generate immediate income and working capital via these great government programmes.