Film financing in Canada (we are including television and digital animation productions) has considerably taken advantage of the Canadian government’s very aggressive stance on growing tax credits, that are non-repayable.
Unbelievably, almost 80% of U.S. productions which have gone outdoors from the U.S. to become created are gone for good in Canada. Underneath the right conditions each one of these productions happen to be, or are qualified for several federal and provincial tax credits which may be monetized for fast income and dealing capital.
How can these tax credits modify the average independent, and perhaps major studio production proprietors. The truth is simply the government is allowing proprietors and investors in film, television and digital animation productions to obtain a very significant (typically 40%) guaranteed return around the production investment. This most definitely enables content proprietors of these productions to reduce the general risk that’s connected with entertainment finance.
Naturally, whenever you combine these tax credits (as well as your capability to finance them) with owner equity, in addition to distribution and worldwide revenues you clearly possess the winning possibility of successful financing of the production in almost any in our aforementioned entertainment segments.
For bigger productions which are connected with well-known names in the market financing is commonly available through in some instances Canadian chartered banks (limited though) in addition to institutional Finance firms and hedge funds.
The irony from the whole tax credit scenario is the fact that these credits really drive what province in Canada a production may be filmed. We’d venture to state that the total cost of production varies in Canada based on which province is required, via work along with other geographical incentives. Example – A production might get a greater tax credit grant treatment if it’s filmed in Oakville Ontario instead of Metropolitan Toronto. We’ve frequently heard ‘follow the money’ – within our example we’re following a (better) tax credit!
Clearly what you can do to invest in your tax credit, either when filed, or just before filing is potentially a significant supply of funding for the film, TV, or animation project. They way to succeed in financing these credits pertains to your certification eligibility, the productions proper legal entity status, in addition to they key issue surrounding upkeep of proper records and fiscal reports.
If you’re financing your tax credit when it’s filed which are done when principal photography is finished.
If you’re thinking about financing the next film tax credit, and have the requirement to finance a production just before filing your credit we advise you train with a reliable, credible and experienced consultant in this region. With respect to the timing of the financing requirement, either just before filing, or once you are most likely qualified for any 40-80% advance on the quantity of the qualified claim. From beginning to end you may expect the financing will require 3-4 days, and the operation is similar to every other business financing application – namely proper support and knowledge related straight to your claim. Management credibility and experience certainly helps also, in addition to getting some reliable advisors who’re considered experts in this region.