Financing Canadian Film Tax Credits

Financing Canadian Film Tax Credits

Film tax credit financing has been in existence in Canada for several years. The good thing is this searched for after financing just been enhanced in a number of ways because of additional enhancements to film and television tax credits, that now likewise incorporate the animation, multimedia, and gaming productions.

Even though some tax credits vary by province there’s a obvious main point here – film tax credits can be found, and you may finance these questions bridge loan /factoring manner. That financing enables you to definitely complete projects, boost the financial ability from the project, as well as better, proceed to the following project with a lot more capital!

In Ontario lately the federal government passed legislation that elevated accessibility to Cartoon Credits. For instance, work expenses that are qualified and vetted increase to 100% for arms length employees who don’t put on incorporation status – for instance – ‘ freelancers ‘.

Another critical change may be the government removed the necessity that qualified projects in animation and visual effects weren’t required to be produced mostly with digital technologies.

Well that’s what’s promising on accessibility to the tax credit itself. So how exactly does the development owner monetize that credit into actual money flow and dealing capital – i.e. the ‘ bridge financing ‘that we pointed out earlier.

Since many Canadian business proprietors and financial managers be aware of financing such niche areas in Canada isn’t a prevalent financing source. This really is best referred to as boutique or niche financing with simply a little number of players participating. To maximise your financing in this region look for the sources and experience with a reputable financing consultant with tax credit financing expertise.

The quantity financed, or advanced for your project under you claim generally is commonly 75% from the claim value – this isn’t a solid rule, but it is a good generalization according to our experience. The funds represent the combined federal and provincial claim, using the aforementioned 75% ltv.

An execllent financing feature is the fact that in a few instances funds can really be advanced before the claim and final certifications. This certainly wouldn’t be pertinent to any or all parties but tend to be described as a significant advantage with a productions.

It can make good sense to any or all parties, such as the financier to finance claims more than 200k like a beginning point. Many fundings have course within the huge amount of money. In a few instances other financing may be regarded as an add-on – i.e. technology financing for computers, software, etc.

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