YOUR COMPANY IS LOOKING FOR TAX CREDIT FINANCING - SR&ED / DIGITAL MEDIA!
CASH FLOW YOUR SR ED TAX CREDIT OF FILM PRODUCTION CREDITS
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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?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Financing SRED credits (SR&ED) or the Film Finance Credit shouldn’t come with ' performance anxiety’! Let's discuss some of the key issues/points around maximizing tax credit claims under these two major programs. In our ( humble ) opinion these two programs, which provide Billions ( yes that's with a ' B' ) of refundable credits and ' cashback' need to be maximized and provide great recovery of cash flow and working capital.
WHAT IS THE SR&ED PROGRAM
The SR ED PROGRAM is Canada's Scientific Research And Experimental Development program under industry Canada and the Canada Revenue Agency /CRA. Let's dig in!
It might seem strange to some that we talk about R&D recovery and film/TV/digital animation tax credits in the same breath but the similarities of the two programs in what’s required to file and what’s required to finance are quite uncanny.
WHAT IS THE ROLE OF THE SR&ED CONSULTANT IN PREPARING YOUR CLAIM
Let's take a look at SR ED (The Scientific Research / Experimental Development) first. When it comes to financing and tax credit, and SRED is no exception it’s about the quality of the claim. While we meet some clients who are comfortable and knowledgeable in writing and filing their research credit the fact is that the majority of these claims are prepared by 3rd parties called SRED consultancies.
HOW DO SRED CONSULTANTS WORK?
This group of folks created a small industry over the years, billing their clients on contingency and taking all the risk in preparing and filing your claim. What a nice bunch of folks right? Well, in return they typically took 15-30% of all funds recovered. We won’t get into the merits of what's fair and reasonable, as thousands of firms over the years certainly felt this was an ok arrangement. But these days you're required to align yourself with a credit SR&ED consultant, as well as divulging on your filing who prepared the claim and what the fee was.
WHAT ARE THE REQUIREMENTS TO FINANCING YOUR CLAIM
When it comes to financing your claim your SRED credits are evaluated under a small handful of key criteria - i.e. general stability and prospects of your firm, owner experience, previous filings ( nice to have, but not required ), and as stated, quality of the claim. So aligning yourself with a solid preparer is key.
LET 7 PARK AVENUE FINANCIAL SHOW YOU HOW TO FUND YOUR SR&ED CLAIM AND CASH FLOW YOUR REFUNDABLE TAX CREDITS
Since financing a tax credit claim in both SR&ED and film is all about shortening the time it takes to receive your funds a quality claim will shorten audits, requests for info, as well as speed up financing approval, which typically only takes days anyway.
THE EXCITING WORLD OF FILM/TV/DIGITAL MEDIA TAX CREDITS
When it comes to the film finance tax credit it's key to know that financing media tax credits is one of the most straightforward and less 'risky' aspects of the ' exciting' (?) world of media entertainment production. While many might view this industry as ' losing a shirt' and dependent on the public success the reality is that the tax credit portion of a project in film, television or transmedia provides anywhere from 30-50% of an entire budget, and when properly financed allows the other portions of a project to come together quite nicely - i.e. equity, Pre-sales, gap, etc.
WHAT DOES A FILM TAX CREDIT ACCOUNTANT DO
The film tax credit accountant mirrors the role of the SR&ED consultant - providing a quality claim via their expertise in the various provincial and federal programs that are combined into your filing.
CONCLUSION
In our opinion financing, sred credits and the film finance credit is an art and science, not the mystery of a séance. Canadian businesses should take advantage of all refundable tax credit programs if they qualify - Seek out and speak to a trusted credible and experienced Canadian business financing advisor who can assist you with eliminating ' performance anxiety ' in tax credit financing.
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Stan Prokop
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