OVERVIEW – Information on financing films in Canada . Tax Credits and other loan strategies via film finance companies will help ensure success in your Media strategy
Financing films in Canada can only be described as … challenging! For some producers and owners it surely must seem like a life long journey in efforts to finance projects. A search will even reveal that numerous films and documentaries exist about the actual financing of a movie! Let’s dig in.
Film finance companies in Canada exist but are surely not in abundance. So whether it’s the tax credits that assist to finance projects or the other elements of a full financing package its critical to get some basics under your belt.
The good news in Canada is simply that there are numerous incentives, primarily under a tax credit regime that that assist you in completing a full financing. The tax credit itself is always a key part of the ‘ puzzle “.
In any aspect of business outside expertise and experience always helps, and that’s an understatement when it comes to film. You want to be able to know how to access various programs, how they work, and to ensure you qualify for maximum financing.
The actual tax credit itself is typically a combination of a federal and provincial amount. To us the phrase ‘Don’t try this by yourself at home ‘ comes to mind when it comes to tax credits. While it is possible to file your own application and claim your best bet is always to get the assistance of a film tax credit account ant – like many areas of accounting expertise these folks ‘ maximize ‘ your claim and ensure you are qualifying for maximum allowable claims . By the way, it’s not unusual for these credits alone to help finance up to 1/2 of your entire project, if not more sometimes.
It all starts with an application for a tax credit ‘certificate’. The formal name of the main credit is the ‘ Film Production Services Tax Credit ‘. It is combined with the provincial part of the claim which is simply driven by the province you choose to produce your project in. Many projects these days are ‘ Transmedia ‘ driven and involve digitization, special effects, etc. A separate credit is available for that part of any project.
Not everyone is aware that many ‘ Canadian ‘ projects in film, TV and media are in fact only ‘ partly ‘ Canadian – they are often ‘ co -productions ‘ which is simply an arrangement that Canadian tax authorities have with many countries to assist in the same type of financing . Again specific rules apply. In truth an actual ‘ point ‘ system exists and is a key part of the tax credit claim… i.e. maximizing points!
If you’re wondering what drives tax credit eligibility in Canada for film the key areas of focus are production ownership, production costs, geographical location, etc.
FINANCING TAX CREDITS : Your applicable tax credits can easily be financed to ensure maximum cash flow . Loans are typically for 70% of the value of your claim and provide solid cash flow for your existing or next project .
While we have focused mainly on tax credits for the obvious reason, film finance companies also assist with the other parts of the project financing puzzle – they include areas such as pre sale financing, gap financing, and minimum guarantee financing.
If you’re looking to get ‘ in the loop ‘ for a better ‘ fast track’ on financing films, TV and digital projects seek out and speak to a trusted, credible and experience Canadian business financing advisor who can assist you with part or all of your project needs.
Author: Stan Prokop – 7 Park Avenue Financial :
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 90 Million $ of financing for Canadian corporations . Info /Contact :
7 PARK AVENUE FINANCIAL = CANADIAN FILM TAX CREDIT FINANCING EXPERTISE
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