YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - INFO@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
Financing refundable tax credits in Canada (sred / film / digital media) continues to be immune from the recent front-page headlines in Canada's business press. Those headlines ' screamed' that (in the case of SR&ED) those generous R&D tax credits were in ' crackdown ' mode from Ottawa.
The actual title of the article was ' Ottawa's Generous Loans... Crackdown' and focused specifically on Canada's SR&ED program, one of the most generous and popular 'subsidies ' in Canadian business. From our perspective, the term ' loans' is a misnomer; businesses actually only receive a refundable tax credit. It's, of course, your decision to finance that refund instead of waiting for it. Let's dig in.
Time will tell if there is, in fact, a crackdown' on the popular R&D program, which provides billions to thousands of firms year in and year out. Some experts say that amount is currently in the 3 Billion $ range and has, in fact, been higher in the past. The program is clearly the largest business subsidy in Canada.
Canadian firms who access the program are keenly familiar with all the changes that happened in 2012, including streamlining the application process while at the same time limiting some of the key deductions.
Any SR&ED tax credit refund can be financed - it's simply a matter of ensuring you have a legitimate claim prepared by a solid SR ED consultant, those third parties that dominate the industry about claim preparation. It certainly helps when your consultant is recognized as someone who can show your claim is not too aggressive and therefore not subject to challenge/audit.
Many firms, in fact, are challenging the govt on what seems like the new ' austerity ' of SR ED approval. As pointed out in the article, the irony is that the govt seems more focused on direct loans as opposed to R&D tax credits.
FILM/DIGITAL MEDIA CREDITS:
Canadian Tax credits in film and digital media also have gotten their fair share of publicity lately. In Nova Scotia, for example, the entire program seems under attack- with the govt reducing the tax credit budget to 6 Million... down from 24 Million!
Again, while any film/media credit is financeable, there seems to be less to finance these days! Naturally, the debate always continues as to how much the govt and Canada benefit from jobs and economic activity from the entertainment industry. Ontario, for example, spends hundreds of millions on film/digital credits. These credits financed almost half of the film and TV budgets based on figures from a few years ago.
Film and TV projects in Canada are akin to our friend Sisyphus’ journey. Producers must sell rights, produce their shows raise equity, finance print and media advertising, etc. Stats show that on a sample 300k TV show production, almost 50% can be covered off by federal and provincial tax credits.
So while the debate rages on, remember that any legitimate SR&ED and film tax credit is financeable. Typical financing is structured as a bridge loan to your company or project (in the case of film/media) for 70% of the total of your SR ED or film tax credit certificate.
If you're looking to finance the film, sred, or digital media credits, seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs.
Stan Prokop
