Film financing in Canada (we are including television and digital animation productions) has significantly benefited from 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 in Canada. Beneath the right circumstances all of these productions have been, or qualify for many federal and provincial tax credits which may be monetized for fast income and working capital.

Just how do these tax credits change the average independent, and perhaps major studio production owners. The truth is simply that this government is allowing owners and investors in, television and digital animation productions to obtain a very significant (on average 40%) guaranteed return on the production investment. This most assuredly allows content those who own such productions to reduce the general risk that is assigned to entertainment finance.

Naturally, when you combine these tax credits (and your ability to finance them) with owner equity, along with distribution and international revenues you clearly hold the winning prospect of a success financing of your production in every of our own aforementioned entertainment segments.

For larger productions that are associated with well known names in the industry financing tends to be available through in some cases Canadian chartered banks (limited though) along with institutional Finance firms and hedge funds.

The irony in the whole tax credit scenario is the fact these credits actually drive what province in Canada a production could be filmed. We may venture to express that the overall cost of production varies greatly in Canada based on which province is used, via labour and other geographical incentives. Example – A production might receive a greater tax credit grant treatment should it be filmed in Oakville Ontario as opposed to 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 just before filing is potentially an important way to obtain funding to your film, TV, or animation project. They secret weapon to success in financing these credits pertains to your certification eligibility, the productions proper legal entity status, as well as they key issue surrounding repair of proper records and financial statements.

In case you are financing your tax credit when it is filed that is normally done when principal photography is finished. If you are considering financing a potential film tax credit, or possess the necessity to finance a production just before filing your credit we recommend you deal with a trusted, credible and experienced advisor in this field. 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 amount of your eligible claim. From start to finish you could expect that the financing is going to take 3-four weeks, and the process is not unlike any other business financing application – namely proper backup and information related right to your claim. Management credibility and experience certainly helps also, in addition to having some trusted advisors who definitely are deemed experts in this region.

Investigate finance of your own tax credits, they can province valuable cashflow and working capital to both owner and investors, and significantly improve the overall financial viability of your project in film, TV, and digital animation. The somewhat complicated realm of film finance becomes decidedly less complicated when you generate immediate cashflow and working capital via these great government programmes.

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