YOUR COMPANY IS LOOKING FOR SR&ED OR FILM TAX CREDIT FINANCING LOANS!
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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?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
SRED AND FILM PRODUCTION TAX CREDIT LOANS
Tax credit loans around the government SR&ED program ( ' Scientific Research And Experimental Development Program') in Canada, as well as the similar credits available in the film/TV and animation industry in Canada, have a lot of business owners and executives being kept up at night. Your ability to access the cash in federal tax credit programs should not be a worry, concern, or mystery that some might think it is. Let's dig in.
TWO TYPES OF TAX CREDITS - SAME LOAN PROCESS! FINANCING THE REFUNDABLE TAX CREDIT IN CANADA
Some might question why we are grouping two different tax credit programs together for our discussion. Our answer is simple - both credits are financeable, they are financed in somewhat of a similar manner, the financing in both cases alleviates the waiting for the government cheques, and again in both cases, SRED credits, as well as Media credits, provide valuable cash flow and working capital to current and future projects in either R&D and Media.
We think we can be further forgiven on that issue simply because it’s very possible to actually file SR&ED claims in film, animation being a good example of that.
GOVERNMENTS PROCESS BILLIONS OF DOLLARS IN SR&ED CREDITS AND FILM /DIGITAL MEDIA CREDITS
Whether Canadian taxpayers like it or not these two programs provide Billions of dollars every year to claimants of SRED or Media Credits. In the film industry that has garnered Canada the reputation of Hollywood North, and in SR&ED Canadian firms strive for innovation and market leadership in their industry and niches.
PREPARING OUR SR&ED CLAIM FOR FINANCING
Let's take a look at THE SR&ED program as it relates to the preparation and financing of claims. It's important to ensure your claim is eligible, and both the government and the financier of your claim wants to minimize questions and fast track approval. Here the role of the SR&ED consultant is key. More often than not the consultant that prepares your claim has the specific industry expertise and understands your field of endeavour.
USE A SR&ED CONSULTANT TO MAXIMIZE OUR CLAIM
When it comes to the financing of your claim we point out to clients that it's sometimes more challenging to finance your claim if it is prepared by yourself. Financiers like to get a strong sense of eligibility and chances of full approval. Many clients we meet have utilized the same consultant for years and actually have a good dialogue with CRA auditors on an annual basis. That's a good thing!
FINANCING FILM CREDITS IN CANADA
In the Media/Transmedia industry (film, television and digital animation) federal and provincial programs focus heavily on providing tax credit incentives based on the amount spent on productions which in turn generates taxes, employment, etc.
Again, similar to our R&D credits a combination of federal and provincial credits in Production, Service and Digital Media are available to Canadian productions and co-productions with qualified U.S. and international partners. These credits can often fund 40-50 % of a budget based on the point system that your Tax Credit Accountant calculates and presents.
HOW DOES THE SR&ED TAX CREDIT LOAN PROCESS WORK
Again, drawing to our similarity of these two major refundable tax credits both are financed in a very similar manner. Financings are structured as bridge loans, almost always with no payments being made during the term of the loan. Typical financing is 70% of the total value of your SRED or Media tax credit, the combo of federal and provincial claims. You receive the other 30%, less financing costs when your claim is funded by the government - the proverbial ' the cheque is in the mail'.
If you're looking to maximize or replenish working capital, start on new projects, or recoup owner investment consider monetizing your tax credit in these two excellent programs.
CONCLUSION
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your needs around tax credit loans for SR&ED or Media. Finally, no more being kept up at night - financing your investments is a logical way out.
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Stan Prokop
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