Tweet

Film Television and Animation Tax Credit Financing – Canadian Solutions

Guest post by: Stan Prokop

Article Overview: Information on film tax credit financing with suggestions for working capital and cash flow financing utilizing your tax credits in the areas of film, television, and animation in Canada.

Film Television and Animation Tax Credit Financing – Canadian Solutions

Financing solutions and models continue to be sought after in the Canadian film televison and animation tax credit financing area. Additionally other working capital solutions for Canadian productions in this area are also available and generally less known as to their existence and their ability to assist productions of Canadian content.

Early in 2010 , as is by now well known by most players in the industry, the Canadian government at both the federal and provincial level 'super charged ' tax credit grants and incentives . Rates and credits increased for specified expenditures by as much as 5-10 per cent in most areas of these tax credits. Additionally a fund was even creating for Intellectual property, with a projected funding of ten million dollars.

Productions with Canadian content are aggressively being produced and savvy principals in Canada are both taking advantage of these credits, and also financing them on an interim basis, or on completion.

A combination of private investing, government non repayable tax credits and even some participation by Canadian banks create a 'tour de force 'of financing assistance for Canadian content. Although a significant previous factor in Canadian growth was the cheaper Canadian dollar even the dollar at par now has not hindered Canadian productions in all three key areas, film, television, and digital animation. (And let's not forgot those lesser known sisters - book publishing and music!)

Productions in Canada are of course financing in the same manner as almost anywhere else - equity by owners, tax credits, loans, and distribution deals. The most recent tax credit incentives in effect replace film tax shelters of previous days. In our opinion this method is more transparent, available, and takes a lot of the negativity associated with 'tax shelters '.

So how do principals access tax credits and how can these tax credits be financed. Did you also know that financing is available on an interim basis also, so for properly documented productions you can obtain interim financing assistance that in many cases becomes a key up front component of your financing and will allow you to complete your project more advantageously from a financial perspective ?

What are the basics of this type of financing - let's review them. To say that film, TV and animation financing is a boutique industry in Canada is of course an understatement. For that reason we strongly recommend that you work with and speak to an experienced and knowledgeable advisor in this area. To access financing you must ensure your project or projects are eligible to be certified for any one or more of the six major tax credits that are available, for example, in Ontario. (We will use Ontario as our example, but each province has similar regimes to assist yourselves.) You should ensure you have created a single special purpose entity, essentially the legal shell under which your production or project will be qualified.

Carefully choose which credits you are eligible for, and ensure you apply for proper certification as soon as possible. Improper or incomplete certification only (as in any business financing process) slows down and stalls your tax credit and the ability to finance it.

Maintain proper disbursement and payroll records - we strongly recommend to clients that they use a specialized accountant or firm in this area. If you can demonstrate your background and experience, have proper certification in process, and are committed to document the project through completion by proper filing of tax returns and financials your tax credit can be financed as immediately as when it is accepted and provided to your project . If you seek interim financing for the same project, and are committed to maintaining and demonstrating the quality in the key fundamental areas noted above you are eligible for accrual financing, or cash flow and working capital assistance immediately even prior to the certification of your project(S).

In summary, 'Hollywood North' appears to be booming again. The economy has picked up, consumers want entertainment in all key sectors, and even the Canadian dollar has not deterred investment in production. Tax credits have increased, and even better yet, by working with the proper experienced partner your credits can be financing when they are certified, or even earlier if you can document a strong go forward action plan on disbursements, payroll, and your experience in this great area of the Canadian economy. And by the way, speaking to an expert in area doesn't hurt - extra tips and assistance may be worth thousands or hundreds of thousands of dollars in cash flow and working capital for your projects!

Related Articles
  Film And Animation Project Finance - It’s A Mad Mad World Without The Canadian Film Tax Credits
  Use Canadian Film Tax Credit Policy for Successful Financing and of Film , TV , And Animation Projects
  Canadian Film Tax Credit Financing
  Using Film Tax Incentives For Television, Animation and Film Finance in Canada
  Looking For Canadian Tax Credits For Film Financing?
  Film Financing in Canada - Use a Tax Credit Consultant for Tax Credit Financing and Cash Flow
  Why The Canada Film Tax Credit Program Is Critical To Your Film Financing
  Why You Should Use Canadian Film Tax Credits For Your Film Production Financing
  Film Finance via independent film funding and the Canadian Film Tax Credit
  The Real Truth On Canadian Film Tax Credit – Let Movie & Animation Financing Refund Loans Enhance Your Project
  Striking Gold With Film Tax Credits – Finance Ontario and BC Film Production Incentives
  Financing Your Independent Film , Movie and Animation via Tax Credits
  How To Finance Your Film tax credits in Canada - Cash Flow your Incentive Grant Today
  Looking for Film Finance ? Your Secret Weapon Is The Canadian Film Tax Credit !
  What If … You Could Cash Flow and Monetize your Canadian Film Tax Credit Today ?!
  How to Finance Production Tax Credits in Film, Television and Digital Animation in Canada
  Information on the Film tax credit for Canadian Independent Productions in Film and Television and Digital Animation
  Can You Afford Not To Use Film Tax Credits When Financing a Film In Canada - An Investor Primer
  Why the financing film tax credits provides ‘real’ film tax breaks and film tax incentives to your project
  Canadian Film Projects Utilize Ontario Film Tax Credit Financing For Success

Article Tags: film tax credit financing, film television and animation credit financing Canada



Related Forum Posts
Prospects in animation business in coming years. - Animation business has great prospects with growing demand especially with screens being used in malls/ retail stores and online promotions with videos besides the regular Television advertising. After the Success of Youtube, the demand for videos has grown tremendously. The animation industry feeds on quality work, a good high-end story, latest technology, graphic and sound effects. Even a good 1 min video might take couple of months or work time and new employees being hired to speed up the process. There is ample scope for this industry to grow and future for entrepreneurs. Please comment.
Research & Dev Tax Credit - at No Cost (Canada) - Brian, I have a colleague that can provide you guidance and even assist in maximizing a R&D Tax Credit from the Government of Canada (If you are Canadian). All this at No Cost to You. I know her well and have referred other people to her. She's got plenty of experience in the field. If you're interested (anyone else on this forum too) just send me a PM and I will share her details with you.
Re: Website Name Help - Its good that you have come up with the idea of setting up a website for your business. Now As it is into Business Solutions, I would recommend that you also include this into the name of the website. This will help you getting better results as far as SEO is concerned. You can start building a brand with this name. As you have already got the name booked, you can try changing it to something on the lines of Business Solutions as in azimabusiness or azimabusinesssolutions. Its a long name but still is good from the SEO point.
Help me name my moms business - I think Infinity Cleaning Services sounds better than Elite Cleaning Solutions... Why the Solutions? What is there to be solved? You simply get a rag with some Windex on it and wipe away.... plug the vacuum and Vac Away, get a mop and mop away. Stick to Infinity Cleaning Services... ICS sounds cool...
re: restaurant start-up - I'm not sure about government grants for restaurants, but my recommendation would be to approach a lender that offers loans under the Canadian Small Business Financing Loan program where the government will guarantee 85% of the loan. You can borrow up to $250,000 to finance equipment and renovations under this program. Restaurants are very risky business, however some of the Chartered Banks will look at restaurants if there is enough of an initial equity investment and you have a solid business plan (experienced management team, good concept and strategic location).


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

SEO Gurus, Software and Ebooks

Ten Reasons to take Notes during Sales Meetings

20 MORE Must-Have Search Engine Marketing Tools

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.