When we speak to clients who are independent film producers, directors, and owners of film, TV, and digital animation projects in Canada they are the first to offer up that one of the largest obstacles to success is typically the financing of their project.
Tax credit financing in Canada continues to play a major role in the financing of projects in our three aforementioned entertainment categories that dominate the industry. Independent producers, directors, owners, et al can certainly be forgiven for feeling they are caught in the middle of the global economic challenges that plague all business , not the least of which is their own industry .
While initial debt and equity capital for your production is often identified in the early stages there is still a gap in the total financing of your production. Monetizing your Canadian film tax credit can assist you in eliminating that gap!
Naturally production costs, as well as those required monies associated with print and advertising are going up – foreign and pre sales certainly help, but buyers and marketers clearly are getting more sophisticated and picky.
Canada is clearly in a position to be enjoying increase production, while the reality is that many countries in the world in fact seem to view fewer productions as coming out in the future, albeit more targeted ones.
Canada’s current very robust tax credits in film, animation and TV rival those of anywhere in the world in overall production credit generosity. In many cases certain credits approach 45- 50%!
A tax credit consultant in some ways is in a more enviable position than you the project owner, that is because he or she does not have to worry about making a ‘ hit ‘ . When you use tax credit financing in Canada, and are able to demonstrate a proper finance plan, what amount of tax credits you expect, and have a credible reputation on other projects you are somewhat assure of getting full funding for your tax credit .
These credits can be financed at time of final filing and certification, or, even more creatively, you can take advantage of accrual financing and receive funds prior to the tax credit being filed. As you should know the tax credit financing is not a loan per se, it’s simply the monetizing of your claim and the collateralizing of the tax credit.
To take advantage of Canadian tax credit financing in film, televison, and digital animation you are encouraged to seek the services of a trusted, experienced and credible business financing advisor in the tax credit area in Canada .- someone who has worked with independent producers and has access to the player that provide this type of capital , institutional or otherwise .
By working with the right partner you will be in a position to arrange one of the critical pieces of the puzzle in film, TV and animation financing, the Canadian tax credit.