YOU’RE LOOKING FOR REFUNDABLE TAX CREDIT FINANCING
FOR FILM OR SR&ED CREDITS!
FINANCING REFUNDABLE TAX CREDITS UNDER THE SR ED PROGRAM
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Film tax credit funding in Canada, as well as the financing of CRA SR&ED Credits - Could they actually be fun to finance. We suppose the book will always be open to that one. Still, there is no more straightforward path to cash flow success than the proper financing of refundable tax credits in Canada for Canadian businesses that are Canadian-controlled private firms. Let's dig in.
SR&ED AND FILM ARE THE MOST POPULAR REFUNDABLE TAX CREDIT PROGRAMS IN CANADA
SR&ED credits and ' film tax ' credits via the Government Of Canada (including movies, documentaries, television, and digital animation), are among the most popular incentives provided by Provincial and federal bodies in Canada. There are other financeable incentives, but these two refundable credit programs account for billions of dollars of funding that make their way into the Canadian and entertainment industries. The formal name of these tax incentives' program is the ' Scientific Research And Experimental Development Program administered by Canada Revenue Agency.
PAST CHANGES IN THE SRED PROGRAM
Some of the changes made in the SR&ED tax credit program, viewed as negative by some, are positive when it comes to the cash flow of these programs. Take, for instance, the extreme scrutiny that the preparers of these applications (‘SR&ED Consultants) came under. Since the claim's quality is one aspect of the financing of CRA SRED CREDITS who prepared i, and what compensation they received is quite simply a positive aspect of yourclaim's successful financingm.
While the folks that prepare the actual claim submission are not regulated in any manner, the scrutiny they came under made things more competitive in terms of your firm, the recipient of the benefit!
One factor in the financing of an SR&ED claim is the amount and accuracy of the claim. Previous filing history also helps but is not a necessity. Even if your CRA SRED CREDIT is part of a normal audit, it is still, of course, 100% financeable.
THE SR&ED BRIDGE LOAN APPLICATION PROCESS IS EASY
The documentation required to finance a SR&ED properly is as basic as any business credit application. It includes financials, owner information, previous filing history, and a copy of your filing. While in years gone by, a SR&ED claim could only be financed after it has been filed, recent trends ( positive, by the way !) include the ability to cash flow r&d expenses before filing the actual claim. It's almost ... fun.
FILM TAX CREDIT FINANCING / MEDIA TAX CREDITS
Some ( not us ) might argue that nothing is more ' risky ' than the world of film/TV/animation relative to financial success. We disagree with a caveat, meaning that you're as close to a sure thing as you can expect to be when it comes to film tax credit finance.
The key aspect to film tax credit funding is understanding that it's only one aspect of a film-type project's financial structure. Other aspects include equity funding, distribution, pre-sales, ' gap ' finance, receivable finance, debt, bonding etc.
Not every producer/project owner has the capability to minimize risk within a group or ' slate ' of projects.
Financing the tax credit involves ensuring all of the other parts of a project are in place. It might be a 100% Canadian production or a legitimate ' co-production' with another country. (Tax credit financing is still available in Canada for approved co-productions).
Similar to SR ED R&D credits, billions await projects in film/TV/animation. While loans and grants are available, a huge percentage of production is often financed by a tax credit's cash flow.
THE ROLE OF THE SR&ED CONSULTANT
It’s essentially a point system based on your spending in production, salaries, and even geography (where you film or produce) plays a role. The ' SRED CONSULTANT ' role is in the case of film replaced by a film tax credit accountant - with good ones maximizing legitimate claims for your research and development.
CONCLUSION
So tax credit financing for sr ed claims and film credits is fun? We'll let you be the judge of that, but if you wish to get on the ' inside ' of proper tax credit funding, seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you maximize refundable tax credit finance claims. Financing your favourite tax incentive program under the income tax act, such as the sr ed claim is easier than you think!
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Stan Prokop
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