Dear Abby - Can I Really Use The Canadian Film Tax Credits (credit ) For 30 - 45% Of My Film Finance Projects ? Signed - 'Anxious '

Dear Anxious - Look northward - to Canada that is, and you'll find that with all the turbulence in U.S. film finance as it relates to tax credits that the Canadian tax credits as they relate to film televison and digital animation will provide you with a tremendous sense of relief. Often the Canadian tax credits can finance anywhere from 30 - 45% of your entire project (sometimes more) based on proper certification of your credit and a solid finance plan completed by yourself as producer.

Ontario, British Columbia, and Quebec have historically been the dominant geographies for film, TV and animation production in Canada - but tax credits are available in all provinces. On many occasions the geography that is best suited to your project is often the most sensible with respect to that provinces tax credit program.

It comes as now surprise to anyone in the industry that film finance is a journey. The challenge is maximizing the true value of your project via a potential theatrical release, and of course the pre requisite DVD, downloads, and broadcast and international rights. All of those will create your future revenue streams, but unfortunately won’t get you the cash flow you need today.

We’re assuming you are the owner of a Canadian project in our aforementioned genres of movies, TV, and digital media. There are what we can call 4 pillars of financing your project. They are grants, debt, equity, and of course our favorite - the film finance tax credit sponsored by the combination of federal and provincial government.

We're going to have to let you take care of grants, debt, and equity - but, and its good news, the Canadian tax credits on your project can cover anywhere from 30-45% of your project. In many cases even a higher amount is available, which comes into play due to certain factors such as shooting or production being held farther away from major centers such as Toronto, Vancouver, Montreal, etc .

The enhanced tax credits come back to you as a cheque - a true non repayable tax credit. The add on good news is that your film tax credit can be monetized or cash flowed, thereby securing automatically a very large percentage of your budget. The government in Canada supports the program strongly; having determined it’s a major overall economic benefit in employment, tax generation, and culture benefits. Bottom line - it’s a direct cash subsidy to your project.

In order to maximize your film finance utilizing the Canadian tax credits you simply need to ensure you have a proper production budget and finance plan. An experienced entertainment tax accountant will help you maximize the total amount of funds applied for in your credit. You will want to ensure you have valid title to your project, and that you have a properly legal entity set up to capture all the revenue and expenses of your project.

A special point system around any Canadian producers and key personnel will further enhance the total dollars you receive. There is data to suggest that 80% of the films that leave the U.S. for production in other geographies end up in Canada.

Your Canadian special purpose vehicle for your project must be Canadian owned, and pay special attention to the points system for creative positions such as director, screenwriter, etc.

So in summary dear ' Anxious ' you can definitely use Canadian tax credits as a key part of your finance plan. Applications can even be made online these days!

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/canadian_tax_credits_film_finance_film_tax_credit.html

Looking for Film Finance ? Your Secret Weapon Is The Canadian Film Tax Credit !

We're going to make a quick assumption here, and that’s that you are not a movie mogul in an international film studio! But we do think we know who you are - a producer or project owner looking to complete your film finance plan.

We'll also make another educated guess - here goes: You have found out that the Canadian film tax credit system can finance anywhere from 30-45% of your project and that’s quite appealing!

Let’s examine the basics of the Canadian film tax credit and determine how it can assist you in financing your project. The Canadian government has made it very clear that it is committed to film (by the way we're including television and animation here!) due to the revenue and cultural aspects of the entertainment industry.

So these tax credits can play an integral part in the overall financing part of the plan. But in talking to clients we make it very clear that the onus is still on yourself, and we know its not easy, to complete the rest of your financial plan .That is of course the remaining financing you need that it achieved by arranged equity, debt, pre-sales , etc - in effect completing the finance puzzle .

More often than not the tax credits we look at tend to be in Ontario and B.C., those provinces have historically been viewed as Hollywood North in film finance - but the reality is that if you can shoot or produce your project in some of the other Canadian provinces those tax credits become even more liberal depending on the geography you have chosen.

So how do you successful navigate the Canadian film tax credit maze? We personally don’t think its a maze, in fact its quite straight forward, but the reality is that when anyone associates a government program with funding it has a perception of being bureaucratic, slow, etc . That’s not necessarily the case with the film tax credit.

Lets ensure you have the basics, and quite frankly you can move to GO and collect 200$ simply by utilizing a core expert team consisting of a Canadian tax credit advisor. Together with your entertainment accountant and lawyer that advisor can fast track you to Canadian film tax credit success.

The process simply involves applying for a Production certificate that ensure your project is eligible based on your spend budget. Non- Canadian producers may even be surprised to know that you can apply on-line through the government portal to get your certificate. This is where having the right ' finance talent ' comes into play, because you want to maximize your credit to achieve the best qualification for the combined federal and provincial credit.

Can the Canadian film tax credit be used to actually finance your film, i.e. real money? Absolutely, positively. Working with a Canadian business financing advisor in this area will allow you to cash flow or monetize your credit. The capital, again, anywhere from 35% ++ of your project can be used to actually complete your production in combination with your other aforementioned sources of financing.

In summary, we are the first to recognize that film finance isn’t easy - but when an accredited partner - i.e. the Canadian government! is willing to step in and help you with 30-45% , or more of your entire budget our recommendation is simple - Take the offer .! Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing your film finance plan.

--


Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/canadian_fi
lm_tax_credit_film_finance.html

Film Finance via independent film funding and the Canadian Film Tax Credit

Getting your film funding in place. It seemed like a short project and challenge at the time! However most independent film finance becomes somewhat of a journey, and that’s of course an understatement. But the Canadian film tax credit can help you play a huge role in pulling the financing for your project together.



Call it a challenge, call it , as some have, ' tricky' or call it skill, but the monetary part of your film , tv or digital animation project becomes a huge part of the producer and owners direct efforts for successful completion of any project .

We are often amazed at how little it takes, in funding, to complete a professional project in any of our 3 entertainment genres (film, television, and digital animation). Yet even smaller budgets have huge financing challenges when you don’t have the financial backing of a major studio. Therefore your total costs of securing rights, paying actors, and actually producing the project often requires a long timeline.

Enter, at stage left, the Canadian tax credit. This is clearly the savior of many a production that is domiciled in Canada, often paying for 30- 40%, and more of a total production. We certainly not saying the rest of your financing becomes a 'cake walk ' , as the expression goes, but our clients routinely maintain that the additional equity, debt, and co production and distribution agreements are much easier to put in place when you utilize the Canadian tax credit .

Naturally the more film funding you can rise via the film tax credit in Canada, as well as debt you can arrange simply means that you are not diluting your ownership position and therefore positioning you well for any financial success on your project.

Its all about partners in business today, and film finance is no exception. By partnering financially, in the right manner, with either co production agreements or Canadian film tax incentives you are able to maintain proper ownership of your project, and that’s of course what it is all about.

Let’s circle back to the Canadian film tax credit. The credits have become increasingly more generous over the years, and apply to all Canadian provinces where you might choose to shoot, film or product your project - depending on your genre again. By properly budgeting your project in a realistic manner an experienced Canadian film financing consultant can assist you in determining the exact amount of dollar eligibility for your tax credit. The tax credit becomes a part of your financial statement filings for the specific legal entity you have created for your project.

You can then finance the credit, which is a non repayable grant/credit from the government. Naturally you can simply wait for the credit, the ' cheque is in the mail ' so the saying goes, but many of our clients choose to finance the credit as soon as they have it certified. Receiving this funding in advance often creates a huge and positive working capital injection that actually helps finance of course the cost of the film. The tax credit is in essence the collateral for the bridge loan you arrange for the film tax credit itself.

Financing and film funding utilizing your Canadian film tax credit can be accomplished in a manner of weeks, and its all about having a budget, a tax credit calculation, and a firm finance plan that identifies the other parts of your project as complete .

Speak to a trusted, credible and experienced Canadian film tax credit financing advisor as to how you can maximize your return on investment for your owners and lenders via the film tax credit in Canada. It's a cash flow 101 great strategy!

-

Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/film_funding_film_finance_film_tax.html