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Film Finances Canada – Monetizing Your Film Tax Credits in Canada Today Via our Secret Strategy!

Guest post by: Stan Prokop

Article Overview: Tax Credit Financing for film, television and digital animation credits in Canada . Information on the new reality of film finances in Canada . How product owners in film, tv and digital animation can access valuable financing via tax credit monetization .

Film Finances Canada – Monetizing Your Film Tax Credits in Canada Today Via our Secret Strategy!

The reality of film finances in Canada has changed dramatically over the last couple years. Unlike many aspects of business financing though, they have improved, and tax credit financing is a large part of that improvement.

Our information is particularly beneficial to independent owners and producers - it naturally goes without saying that the larger studios and film finance conglomerates historically review your production in any of our three entertainment segments, ( film / tv, digital animation ) , they buy into your concept or production, and then they fund it via their own often substantial resources .

Naturally if your production can get on board that above boat that is truly a perfect world, however the reality is that the majority of production, even larger names one with 'name actors 'still struggle to find proper financing. The truth is simply that the financing of a project comes from a variety of solutions that are cobbled together to form a full financing complement for your production.

Film finance is no different than the financing of any business venture - it all comes down to two components, debt and equity. Your job is of course to maximize the right mix of those two essential elements of any type of financing.

Equity financing is your springboard for your venture naturally , however today's reality in the Canadian marketplace is that the ' soft money 'or non equity portion of your production in film, tv, or digital animation can in fact come from the various tax credit incentives made possible by combined federal and provincial initiatives in Canada .

Want to know a secret? It's the secret we refer to in our teaser title in this document. Here it is à 99% of the entertainment world might believe that tax credits for film financing in Canada can only be monetized when they are filed and certified , using traditional year end accounting guidelines . That is not necessarily the case! You can also, in many circumstances, access film finances via an 'accrual strategy '. In that case we determine your overall sense of eligibility for future credits, and you receive the cash upfront , based on certain per cent ages, allowing you to immediately access the ' soft money ' that we have previously started to discuss . That's a solid working capital and cash flow strategy for your production, which at the same time brings valuable cash flow and working capital into your project on an up front basis .

The quick example we can utilize in a film type scenario (it could just as easily be TV or animation) is the proverbial 1 Million dollar budget. If you utilize the right tax credits in Canada, which are non repayable of course, then you can immediately access cash flow in the 400,000- 500,000.00 range for your project. Given that you probably have raised some equity already those funds, plus the tax credits have you probably financed to the 90% of the total project at this point. That simply leaves the 'gap', which all of a sudden is less of a challenge than you, thought. Canada doesn't have as robust a banking focus on film TV and animation financing, but there are a number of methods to still fill 'the gap '.

Financing for tax credits in Canada is often done on an approximately 60-80% loan to value based on the value of the credit. Each situation is a little different only because of the size of the production and resultant credit, as well as the team you bring to the table Vis a Vis proper accounting and financial documentation of your project.

Speak to a credible, trusted and experienced advisor in this area to monetize your film finances in Canada based on your tax credit financing strategy as a key component in overall project success.

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Article Tags: film finances Canada, film tax credits Canada



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