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7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
Shred (' SR&ED') tax credits and film tax programs are really all about timing and our time investment. Timing is of course everything in business... and life. Let's examine the benefits and reasons for financing your refundable tax credits in Canada. Let's dig in.
To say the entire ' SRED ' process ' takes time ' is a bit of an understatement. Naturally firms that file every year to get their share of the Billions of dollars the govt ' doles out ‘for this program probably have the process down to a tee. That is still time and money, though, and it's probably a bit daunting for the first-time applicant. But oh, the reward!
Our them of timing really involves the absolute start of your SR&ED process right up to final filing of your claim . And oh yes, then the ' waiting ' part of our timing theme begins... as business owners/financial managers wait for their refund to be reviewed, processed, and funded .. the proverbial ' your cheque is in the mail!
Relying on a qualified SR&ED consultant is also a key part of the overall SRED process. It's these folks that identify your eligibility for the claim and create a claim summary that maximizes your total recovery If you choose to finance your claim , either before or after it is filed ( yes ' before ' is possible!) the reputation of that consultant is one of the votes to get your claim approved and financed.
Most business owners who file SR&ED have a fairly good handle on how much of a claim they will have based on the total amt of their spend vis a vis the govt formulas. As far as financing that claim you're eligible for a 70% loan to value vis a vis the total amt of your claim. For example a 100k claim would generate a 70k bridge loan in your favor - no payments are made for the duration of the financing. That duration of course depends on the timing of your review given the govt review, receives, and sometimes audits claims depending on size or their technical nature.
Many businesses eligible for 'SHRED' actually don't apply - they give various reasons - ' too complicated', ' we don't know if we qualify', ' we don't have anyone to prepare our claim', ' someone else does our r&d'.. Etc.
We'll let the business owner then decide if he or she wants to file and possibly finance a SR&ED claim - suffice to say their competitors are.
FILM TAX CREDIT PROGRAMS: Canada has of course gone ' HOLLYWOOD NORTH ' big time in recent years - the fluctuating Cdn dollar also plays a part in the decision to film, produce or animate a project in Canada.
Tax credits for file handed out in the Billions in Canada, by almost every province. Safe to say the debate rages on as to why the govt issues refundable tax credits... aka ' real money ' for this industry. While the pundits debate the producers / owners collect though!
In the U.S. tax credits vary among the 50 state regimes. Funding seems to come and go, as does the debate. Additionally not all states have ' refund credits ' as in the Canadian tax regimes. Canada is much more stable in this manner and most provinces and the federal govt agree that these credits benefit in some manner Canada.
Refundable film / TV and animation tax credits are fully financeable, much in the same manner as our aforementioned SR&ED program,
Whether you're making a movie of investing in commercial R&D in the commercial business environment consider financing your tax credits to cash flow those refunds immediately. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your tax credit financing needs.
Stan Prokop
