How To Raise Money For Film Financing via Ontario and BC film grants and Tax Credits

Can your film financing (television and animation also by the way) via Ontario and BC film grants and tax credits be the final piece of your project financing puzzle. We'll let you decide but we can’t imagine you not entertaining any financing, that is non repayable, that might cover 30 -45% of your entire project budget.

In order to achieve financing success you need expert help and information on how the tax credit and film financing area works in Canada. Two of the most common regions for film, production, and therefore tax credits are Ontario and BC ( British Columbia ) , but not everyone is aware that pretty well every Canadian province, in conjunction with Revenue Canada ( for you Americans that’s our version of the IRS !) has a robust film tax credit program.

Only when you master the techniques and processes around film financing and the use of the generous tax credits will your project be properly financed - That’s of course unless you're a major studio, but that’s not the clients we're addressing here.

We should note also that once you develop a process, and have a proper team around that typically an entertainment accountant, a lawyer, and a production accountant) then you can pursue and replicate the same process of funding your projects via Ontario and BC film grants and tax credits for all future projects.

The film tax credits in effect ' bridge the gap ' between your vision of the project, its potential financial success, and your ability to fund and complete the project.

Film tax credits and film financing happens of course everywhere in the world. Where Canada excels is the fact that you have generally uniform process for the entire country and the program is well funded and generally very efficiently administered. It's one of the few times in our business careers where the line ' I'm from the government and here to help ‘makes actual sense!

Lets use Ontario as a quick example of how to raise the tax credit financing you need. The Ontario program is so efficient these days that the applications for financing are actually done online via the government body that administers and approves the tax credit certificates. However, before you get to that stage, as we noted earlier, you need to be in a position to have a proper budget in place that will reflect what the eligible spend is on the items that are being funded by the tax credit.

As a quick rule of thumb you can generally expect your budget to return approximately 35% of your labour expenditures for a production filmed or produced here in Ontario. The reality is that if you film outside of the Greater Toronto Area formulas are in place that further enhances the credits by an additional 10 per cent.

The additional great news we share with clients is that your tax credits are financeable. That dramatically changes a good deal into a great deal because you can receive loan financing on the tax credit either during production as you spend, or when completed and you have your final certificates in place . Naturally for your film tax credit to be financed you need to have a proper legal entity in place (commonly known as special purpose vehicles - SPV) and your tax returns and filings must be up to date.

Raising money for film financing involves 3 components, equity, debt and mezzanine, and tax credit financing. Let Ontario and BC film grants and tax credits be the final piece of your financing puzzle for your project in film, TV, and animation. Speak to a trusted, credible and experience Canadian business financing advisor in the film tax credit area to ensure you maximize this great finance strategy for your project.

--


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.parkavenuefinancial.com/film_financing_ontario_bc_film_grants_tax_credits.html

Why The Canada Film Tax Credit Program Is Critical To Your Film Financing

How could a government tax credit incentive possibly be ' critical ' to your success in film financing? The answer is very simple : The Canada film tax credit program is usually the last piece of your financing , and we see many cases where it allows the other components of your project, i.e. equity, debt and ' gap ' to come together in a final fashion .

And that of course allows you press the button on ' ready, action, camera, shoot ' which is what your project is all about. And to be clear, we're talking about the three genres of entertainment - film / movies, television, and animation. Animation credits, somewhat unheard of years ago, are quickly gaining traction in the industry as people flock to this type of entertainment. Think Shrek!

Tax incentives in Canada give film investors the ability to complete financing successfully. Pick a number, any number... we'll pick one for you - 30 - 40%! That is a typical amount you can expect to receive on a production tax credit in Canada. The actual final exact amount depends on the provincial geography you are shooting or producing in - as each province has adopted separate schedules of reimbursement .

These tax film financing incentives have once again brought producers and owners of project back to Canada. While in the past a major decision around Canadian content seemed to revolve around the lower priced Canadian dollar the Canadian ' loonie ' ( that's what we call a dollar up here!) is touching parity as we head into 2011- so the whole forex issue is no longer the driver - but Canada film tax credits are .

If you are not a major movie studio the film financing incentive provided to the industry by the production services tax credit has become one of the most important tools in your financing plan for your project .

The Canadian tax credits stimulate of course revenues that are generated from the industry as a whole.

Let's recap some basics, so you can fast track and simplify your film financing project. It all about ' qualifying ' - you either do or you don’t. And if you qualify, you get your funding via a non repayable tax credit. The power of the tax credit increases significantly when you monetize or cash flow or finance (they all mean the same thing!) your tax incentive credit. These credits can be financed when your project is completed, returning cash flow to the owners, or , as importantly , they can be used as a financing strategy to generate cash flow as you film or produce your project and funds are expended .

What qualifies in your project surprises most of our clients on the upside! Including many of the costs of a project you may be surprised on.

We love the expression that the word ' Team ' is an acronym for ' together everyone achieves more". Your team in film fax credit finance and film financing is critical, so aligning yourself with a Canadian tax credit business financing advisor, as well as a qualified entertainment accountant will only do two things - ensure you qualify, and maximize your credits.

And we humbly submit that’s what it is all about.
--

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/canada_film_tax_credit_film_financing_incentive.html