Film Tax credit financing for film, animation, and digital media productions continues to be a sought after financing by Canadian entrepreneurs.
Canadian entrepreneurs are fortunate in that a number of recent changes have been made to enhance the overall viability of Film and Television credits in Canada.
Using Ontario as an example in March 2010 the government enacted legislation that increased Ontario Computer Animation credits. Therefore financing of such projects simply brings in additional capital. As an example labour expenditures which are qualified and vetted increase to 100% for arms length employees who don’t have incorporation status – for example ‘freelancers’.
In the animation and visual effects area there was a government focus to remove the requirement that effects had to ‘ primarily ‘ be completed with digital technologies.
How can these film tax, TV, and digital media credits be financed. Financing these tax credits is a very boutique business in Canada. Entrepreneurs and their advisors are cautioned and advised to work with credible, experienced specialists in this niche financing area.
The film tax credit financing (as well as animation, TV, etc) is essentially a bridge loan when your production entity has a financing need.. The amount financed can be a combination of federal and provincial claims, and it generally recommended that the total value of our claim be in the 200, 00.00$ range, which would be a combination of both the federal and provincial portions of your credit.
We meet with many firms who also have needs for other types of financing, which would include separate SR ED (SR&ED) credits, equipment financing, etc. It would sometime make prudent sense to consider a financing that satisfied the complete needs of the company or production.
The hottest new sectors of financing in this area are the popular animation, virtual reality and of course gaming areas of consumer entertainment.
Naturally to be able to finance a claim it must be reviewed and processed by the appropriate tax credit office, for example the Ontario ‘ OMDC ‘ tax credits & Financing Programs Dept ‘.
In our work with clients we advise that it typically takes 2-3 weeks, sometimes longer to finance a tax credit. This process should not be daunting for the entrepreneur or your production company, as it mirrors any other financing business might undertake- for example an application form, due diligence, legal documentation of the financing, etc.
We would point out though that the main emphasis on the financeability of your claim is the actual tax credit itself, as in many cases the product has not ‘gone to market ‘so to speak.
Financing your film, multimedia, and TV tax credits is a great way to access bridge capital and allow our entity to immediately access funds, as opposed to waiting for funds until post production and commercialization.
Talk to a film tax credit financing expert and you are on the way to a unique method of financing your productions.
7 PARK AVENUE FINANCIAL
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Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 100 Million $ of financing for Canadian corporations .
‘ Canadian Business Financing With The Intelligent Use Of Experience ‘
ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
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