YOUR COMPANY IS LOOKING FOR TAX CREDIT FINANCING
FUNDING YOUR REFUNDABLE TAX CREDIT INCENTIVES
FILM AND SR&ED TAX CREDITS ARE FINANCEABLE!
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Financing & Cash flow are the biggest issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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South Sheridan Executive Centre
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Oakville, Ontario
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A bridge loan for a film tax credit or SR&ED R&D incentive credits allows you to finish the game a lot sooner while winning at the same time. Our bottom of the 9th inning analogy seems a correct one - it's been a long game from the time the SR&ED or film tax credit process was started.
FINANCING YOUR REFUNDABLE TAX CREDIT FINISHED THE GAME!
Financing via a bridge loan for either of these two finishes the game, and cash flow is declared the new winner. Let's dig in separately for each type of credit. Then we'll bring the financing aspect for both in - a remarkable similarity exists for the finance solution to tax incentive claims.
CANADA'S SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT PROGRAM
SR&ED: From the business owner/financial manager's perspective, there’s a long game plan in place for research and development credits. As much as owners wish to accelerate the process, several key issues always slow things down - sometimes a little, sometimes a lot.
THE ROLE OF THE SR&ED CONSULTANT
And by the way, that includes the necessity to address recent dramatic changes to the program in the last few years. Those changes revolve around the claims' actual filing, who writes your claim, and how it is calculated. Most regular or new claimants find out; it’s the ' SR ED Consultant ' that typically prepares a claim.
Aligning yourself with a qualified consultant allows you to both maximize the financial benefit attached to your claim as well as minimizing or eliminating the cost and risk associated with a research claim. That's because the majority of SR&ED consultants prefer to be paid on contingency - they take on. The risk and cost of preparing a good claim. Their compensation? They receive a negotiated portion of the refund as their fee for preparing a proper claim.
FILM/TV/MEDIA CREDITS
No type of financing is more of an ' art ' than the complexity around a full finance package relating to a media production. Getting capital together in areas of equity, debt, and mezzanine financing is, at its best moments - seriously challenging.
FILM AND DIGITAL MEDIA TAX CREDITS ARE A COMBINATION OF FEDERAL AND PROVINCIAL CREDITS
The film tax credit incentives provided by the combination of provincial and federal incentives (typically combined) assist independent producers and production owners in filling gout a large part of that financing need. A healthy tax credit component clearly and obviously eliminates some of the other financial risks associated with any project.
THE ROLE OF YOUR FILM TAX CREDIT ACCOUNTANT
While a small handful of Canadian chartered banks play some role in film finance, it’s the tax credit that usually becomes the cornerstone of any financing. The role of the SR ED consultant now changes to the Film Tax Credit Accountant ‘. He or she has the same goal - maximize the amount you can claim and receive for Canadian content - which by the way, can be in the form of co-productions with other accredited countries. Labor, service and hard assets become eligible for healthy reimbursement. Even where you film or produce gets you extra points/extra funding.
THE NEW KID ON THE BLOCK?
And we do not forget the ' digital ' aspect of tax credits - as many projects these days are ' Transmedia ‘in nature - i.e. Special FX, animation, etc. A separate (and again ' healthy ‘) tax credit exists for the digital world.
FINANCING REFUNDABLE TAX CREDITS
So, it's first and goal ' for the owners of a SRED or film tax credit. The financing of either of these credits is similar; it’s done via a bridge loan and allows you to monetize your claim as fast as you can apply. Both credits are typically financed under the same structure - bridge loans with a 70% advance against the total amt of your claim. The monthly payments? There are none, as your loan is finalized when your claim is approved and funded by the government. At this point, you receive the 30% balance of your claim, less financing costs.
CONCLUSION
New innovative SR&ED Financing/film tax credit allows you to cash flow your claim before filing it. This works best when you've got a track record but is not necessarily a strict requirement.
Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor, and let us walk you through the simple application process when your goal is to finance research and film incentives. A great way to successfully eliminate the 9th inning challenge!
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Stan Prokop
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