YOU ARE LOOKING FOR SR&ED LOANS OR FILM/DIGITAL MEDIA TAX CREDIT FINANCING
FUNDING THE SR ED TAX INCENTIVE CREDIT AND FILM PRODUCTION CREDIT IN CANADA
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Financing & Cash flow are the biggest issues facing business today.
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SR&ED and Film Tax incentives in Canada financeable? We're the first to admit it when we heard that many years back, but it certainly proved to be 100% true. Let's dig in.
CANADA'S TWO MOST POPULAR REFUNDABLE TAX CREDIT PROGRAMS - SR&ED AND FILM
The key word on these two programs is clearly ' incentive' because these two separately sponsored programs under Canada Revenue Agency are clearly incenting industry (when it comes to the SR&ED program) and Media (when it comes to generous refundable tax credits in the areas of film, TV, and digital media/animation).
CHANGES IN THE SR ED PROGRAM
While the financing of SR&ED credits via bridge loans has pretty well stayed the same ( in fact any changes have been actually positive!) the whole area of the research tax credits incentive has been the ultimate moving target for a couple of years now. Industry, and the SRED consultants that prepare these claims, have clearly been scrutinized significantly, and all parties have seemingly rationalized all the ' adjustments' to the program. In effect, the program was perceived as ‘ not working ‘.
SR&ED LOANS
Those changes also in fact have affected the claims that are financed, as in some cases SR&ED loans are smaller as equipment in the ' Capital expenditures' area is not eligible after 2014, and as another specific example: outside contractor costs/expenses were also reduced. CRA also has invested more funds in the scrutiny and audit of claims.
THE ROLE OF YOUR SR&ED CONSULTANT
Not all changes to the SR ED incentive were perceived as negative though... most view the streamlined online application form as positive, and those SR& ED consultants that for the most part perform their work on ' CONTINGENCY ' (they take a % of your total claim as their fee) certainly in many cases ' cleaned up their act ' as only credible consultants survived the scrutiny of their fees, reputations, etc.
FILM PRODUCTION CREDITS / DIGITAL MEDIA CREDITS
Film tax incentives also offer billions of dollars each year to the Canadian media industry. It also involves an application process that in most cases is championed by a ' tax credit accountant ' - in effect a version of our aforementioned SR ED consultant. Different industry, same type of guy or gal!
As revenue opportunities abound and in fact grow due to the rapidly changed method in which media is sold and then viewed Billions of dollars also are available to projects that properly qualify and file for film tax credits.
FEDERAL AND PROVINCIAL FUNDING PROVIDES BILLIONS OF DOLLARS TO THE FILM/TV INDUSTRY
The success of the Canadian film tax incentive is clearly at the expense of other countries in many cases, as Canada does a great job of ' luring' productions under various co treaties, generous combined federal and provincial credits, and a reputation of fiscal stability and ongoing funding.
FINANCE YOUR SR&ED CREDITS OR FILM TAX REFUNDABLE CREDITS
Have we forgotten anything? Oh yes, just the main subject today: FINANCING SR ED and the FILM TAX CREDIT INCENTIVE is 100% possible. A great recent addition to financing these two credit programs is your ability to potentially finance claims that are not yet filed, bringing even more cash flow into your company or project.
HOW DOES A TAX CREDIT BRIDGE LOAN WORK?
Tax credit loans are almost always structured as no monthly payment bridge loans, with the tax credit (SR ED or Film) as the main collateral. Naturally, your financing claim has to have some depth, such as good management, potentially a previous positive claim record, etc. The application process is fast and flexible.
CONCLUSION
So, serious? Absolutely. Consider financing your SR&ED and Media tax credits. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing the true benefits of your claims - CASH FLOW!
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Stan Prokop
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