Film financing in Canada (we are 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 who have gone outside of the U.S. to be produced have wound up in Canada. Under the right circumstances all these productions have been, or qualify for several federal and provincial tax credits which can be monetized for immediate cashflow and working capital.
How do these tax credits impact the average independent, and in many cases major studio production owners. The reality is simply that this government is allowing owners and investors in themoviedb, television and digital animation productions to acquire a very significant (on average 40%) guaranteed return on the production investment. This most assuredly allows content people who own such productions to minimize the entire risk that is associated to entertainment finance.
Naturally, once you combine these tax credits (along with your capability to finance them) with owner equity, in addition to distribution and international revenues you clearly have the winning potential for a hit financing of your own production in any of our aforementioned entertainment segments.
For larger productions that are connected with well known names in the market financing is commonly available through sometimes Canadian chartered banks (limited though) as well as institutional Finance firms and hedge funds.
The irony of the whole tax credit scenario is that these credits actually drive what province in Canada a production could be filmed. We would venture to state that the total cost of production differs a lot in Canada based on which province is utilized, via labour along with other geographical incentives. Example – A production might receive a greater tax credit grant treatment when it is filmed in Oakville Ontario as opposed to Metropolitan Toronto. We have now often heard ‘follow the money’ – in our example we are pursuing the (more favorable) tax credit!
Clearly your capability to finance your tax credit, either when filed, or before filing is potentially a significant supply of funding for your film, TV, or animation project. They secret weapon to success in financing these credits concerns your certification eligibility, the productions proper legal entity status, in addition to they key issue surrounding upkeep of proper records and financial statements.
If you are financing your tax credit when it is filed which is normally done when principal photography is done. If you are considering financing a future film tax credit, or hold the necessity to finance a production just before filing your credit we recommend you deal with a reliable, credible and experienced advisor in this region. Depending on the timing of bfkoab financing requirement, either prior to filing, or once you are probably qualified to receive a 40-80% advance on the total amount of your eligible claim. From beginning to end you can expect that the financing is going to take 3-four weeks, and the process is not unlike any other business financing application – namely proper back up and data related right to your claim. Management credibility and experience certainly helps also, along with having some trusted advisors who are deemed experts in this field.
Investigate finance of the tax credits, they could province valuable cash flow and working capital to both owner and investors, and significantly improve the overall financial viability of your own project in film, TV, and digital animation. The somewhat complicated arena of film finance becomes decidedly less complicated once you generate immediate cash flow and working capital via these great government programmes.