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 which have gone away from the U.S. to become produced have ended up in Canada. Under the right circumstances all of these productions happen to be, or are eligible for many federal and provincial tax credits which can be monetized for fast cashflow and working capital.
How can these tax credits impact the average independent, and perhaps 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 obtain a very significant (normally 40%) guaranteed return on the production investment. This most assuredly allows content owners of such productions to minimize the entire risk that is assigned to entertainment finance.
Naturally, whenever you combine these tax credits (along with your capacity to finance them) with owner equity, as well as distribution and international revenues you clearly hold the winning potential for successful financing of your production in almost any of our own aforementioned entertainment segments.
For larger productions which can be connected with well-known names in the market financing is usually available through sometimes Canadian chartered banks (limited though) in addition to institutional Finance firms and hedge funds.
The irony in the whole tax credit scenario is the fact that these credits actually drive what province in Canada a production could be filmed. We would venture to say that the total cost of production varies greatly in Canada based on which province is employed, via labour and other geographical incentives. Example – A production might get a greater tax credit grant treatment should it be filmed in Oakville Ontario rather than Metropolitan Toronto. We have now often heard ‘follow the money’ – within our example we have been after the (more favorable) tax credit!
Clearly your capability to finance your tax credit, either when filed, or prior to filing is potentially an important source of funding for the film, TV, or animation project. They way to succeed in financing these credits concerns your certification eligibility, the productions proper legal entity status, as well as they key issue surrounding maintenance of proper records and financial statements.
If you are financing your tax credit after it is filed that is certainly normally done when principal photography is completed. If you are considering financing a potential film tax credit, or hold the necessity to finance a production prior to filing your credit we recommend you deal 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 amount of your eligible claim. From start to finish you could expect that this financing is going to take 3-4 weeks, and the procedure is not unlike some other business financing application – namely proper backup and data 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 your tax credits, they are able to province valuable cashflow and working capital to both owner and investors, and significantly improve the overall financial viability of the project in film, TV, and digital animation. The somewhat complicated realm of film finance becomes decidedly much easier once you generate immediate cash flow and working capital via these great government programmes.