YOUR COMPANY IS LOOKING FOR FILM, MEDIA OR SRED (SR&ED) TAX CREDIT FINANCING!
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 - sprokop@7parkavenuefinancial.com
Are we kidding? Definitely not! Canadian business owners, including those in the film and video industry in this case, can access much-needed funds when it comes to film tax credit financing and SRED (SR&ED) finance. And that includes media tax credits also, as that is probably one of the fastest-growing aspects of the entertainment industry.
TAX CREDIT FINANCING IS SIMPLE & STRAIGHTFORWARD
The good news is that you don't need any secret techniques to complete the monetization of tax credits in Canada. Frankly, compared to some comparable U.S. programs it could not be easier and more straightforward.
As we have noted, today we are primarily talking about 2 specific tax credits when it comes to financing - the first is the ' SRED' program, and, at the opposite end of the spectrum an industry fraught with excitement ( and frustration?), film, TV and digital media projects.
Let’s do the SR&ED recap first! We can safely say that, more than ever, it's all about the quality of your claim. The ' advisors' and ' SRED Consultants ' are a mini-industry in Canada - in effect, they are the brain trust preparing the majority of claims in Canada.
THE ROLE OF THE SR&ED CONSULTANT
The majority of transactions completed by these consultants and advisors bill their work on a contingency basis, in other words, they are assuming a large part of the risk on the acceptance and approval of the claim. It's of course up to you as a business owner/manager to source a consultant that’s capable and experienced, as different industries have different nuances.
BILLIONS OF DOLLARS ARE FUNDED EVERY YEAR UNDER CRA SR&ED
It's their work that will be viewed by your CRA office when it comes to legitimacy and the amount requested. The fact that the SRED credit is a non-repayable cheque from the government allows thousands of Canadian corporations to access billions - yes that’s billions with a ' b ‘, of dollars that are used for further research, working capital, basically any general corporate purpose.
Timing is always a discussion point in SRED claims. First-time claimants typically might have their claims audited from both a combination of technical and financial accuracy. That of course always comes back to the quality of your claim.
HOW DOES THE SR&ED LOAN WORK?
Let's move on to the subject of... ‘Cash '. Not all SRED claimants know their SR&ED claim can be financed. And the good news, it’s hardly a complex proposal. A basic business application that includes your firm’s financials, a copy of the SRED claim, and some supporting information on the claim and your company is all you need. SRED loans are typically done at 70% loan to value, simply meaning that for every $ 100,000.00 of claim your loan amount be in the 70k range. And the monthly payment? 0. Yes, Zero. That’s because your loan is repaid when you receive your government cheque - the remaining 30% comes back to you less financing costs.
One of the most dramatic changes in SR&ED financing is the fact that you can even get accrual financing these days. That simply means you can cash flow your claim prior to filing it, as you spend and recoup funds. Now that’s creativity.
FILM TAX CREDIT FINANCING
Canada is a leader in film, TV and digital media incentives. And those incentives, aka the ' tax credit ', can be monetized. And that includes, as we have noted the digital media tax credits that are starting to be a huge part of the industry. The largest factor in the makeup of the digital credits is the emphasis placed on recovering your actual labour expenses. Simply speaking, you're recovering, via a non-repayable credit, a majority of your salaries on your projects.
Using Ontario as an example it is safe to say that your actual programmers, contractors, employees, etc must reside in Ontario. That makes sense, but the Media tax credit is available in pretty well all the provinces of course.
Generally speaking your film, TV and media claim has significantly less risk from an audit or clawback perspective. In other words, you just have to prove you spent the money which can easily be verified via your payroll records, etc.
CONCLUSION
The process for financing film, TV and media credits. Same as our SRED. A basic application, copy of your claim and supporting data, etc. And those same financing criteria remain intact, relative to amounts financed, etc.
Our bottom line today? Film tax credit financing, SRED finance, and Media tax credits are viable cash flow assets for any owner of the credits. Use them to grow your company, complete your projects, or start another project. Speak to a trusted, credible and experienced Canadian business financing advisor today.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
