Finance Via Independent Film Funding

It seemed like a short project and challenge at the time! However most independent film finance becomes somewhat of a journey, and that’s of course an understatement. But the Canadian film tax credit can help you play a huge role in pulling the financing for your project together.

Call it a challenge, call it, as some have, ‘ tricky’ or call it skill, but the monetary part of your film, tv or digital animation project becomes a huge part of the producer and owners direct efforts for successful completion of any project.

We are often amazed at how little it takes, in funding, to complete a professional project in any of our 3 entertainment genres (film, television, and digital animation). Yet even smaller budgets have huge financing challenges when you don’t have the financial backing of a major studio. Therefore your total costs of securing rights, paying actors, and actually producing the project often requires a long timeline.

Enter, at stage left, the Canadian tax credit. This is clearly the savior of many a production that is domiciled in Canada, often paying for 30- 40%, and more of a total production. We certainly not saying the rest of your financing becomes a ‘cake walk ‘, as the expression goes, but our clients routinely maintain that the additional equity, debt, and co production and distribution agreements are much easier to put in place when you utilize the Canadian tax credit.

Naturally the more film funding you can rise via the film tax credit in Canada, as well as debt you can arrange simply means that you are not diluting your ownership position and therefore positioning you well for any financial success on your project.

Its all about partners in business today, and film finance is no exception. By partnering financially, in the right manner, with either co production agreements or Canadian film tax incentives you are able to maintain proper ownership of your project, and that’s of course what it is all about.

Let’s circle back to the Canadian film tax credit. The credits have become increasingly more generous over the years, and apply to all Canadian provinces where you might choose to shoot, film or product your project – depending on your genre again. By properly budgeting your project in a realistic manner an experienced Canadian film financing consultant can assist you in determining the exact amount of dollar eligibility for your tax credit. The tax credit becomes a part of your financial statement filings for the specific legal entity you have created for your project.

You can then finance the credit, which is a non repayable grant/credit from the government. Naturally you can simply wait for the credit, the ‘ cheque is in the mail ‘ so the saying goes, but many of our clients choose to finance the credit as soon as they have it certified. Receiving this funding in advance often creates a huge and positive working capital injection that actually helps finance of course the cost of the film. The tax credit is in essence the collateral for the bridge loan you arrange for the film tax credit itself.

Financing and film funding utilizing your Canadian film tax credit can be accomplished in a manner of weeks, and its all about having a budget, a tax credit calculation, and a firm finance plan that identifies the other parts of your project as complete.


Getting Financing For Franchises

In many cases, entrepreneurs need to get financing for the franchises they buy. This can make it take longer to get a franchise going, and it can be intimidating for many people who want to start a business. Instead of being intimidated by the available methods for financing franchises, familiarize yourself with the financing options available. There are options available for most entrepreneurs, though very large financing fees are harder to come by.

Some franchises seek to make the financing process as simple as possible for new franchise owners. This can be done by providing financing to entrepreneurs who are seeking a franchise. This both attracts new franchise owners to them and gives the company the reassurance that the financing is not out of their control. The financing will not be pulled by someone else, ruining the deal for both parties. Instead, the financing is assured and more franchisees will be interested.

Some franchise companies will finance a part of the cost of the franchise of the entire cost. The terms of a franchisor loan will different from company to company. Be sure that you understand the terms before deciding on this type of financing. Some companies offer financing that has a balloon payment due after a few years. Others have delayed payment plans that allow you to get your business up and running before any payments are due.

If your franchise company doesn’t offer financing, the company may have a financing consultant who can tell you all of the other options for getting your own financing. If you’re unsure how to begin the process of looking for financing, ask about what kind of assistance franchisees are given in finding financial assistance.

Another option is to go directly to a bank that you have a history with and asking them about the business financing options available. A business loan requires you to have a good credit rating and to have a solid business plan to present. You may need to hire a business plan writer to create a thorough look at the franchise you want to finance and how it will realistically perform over the next few years.

Though the recession has made banks more reluctant to loan money, even to start franchises, it is still possible to get a substantial business loan if you have excellent credit and experience running a business. A plan that includes a look at the local market, an analysis of the past success of the business type that you want to own and other factors can help a loan committee to see that your business needs are worthy of a loan and that the bank will not be taking an unnecessary risk by lending it to you.

Once your financing is together, you can begin the process of buying a franchise and beginning your training. Most franchises come with some financial training to help you to keep the books and maximize your business profits. This enables you to stay on top of your financing payments as agreed.


How To Get Financing For Your Business

Brief overview: It does take money to make money! There are costs to be covered by entrepreneurs seeking large amounts of $$$. Be prepared for what is a fair cost, and what is not…

“It takes money to make money” is very pertinent when it comes to raising millions of $$$ for a new business. There are very real costs involved in creating that winning business you have in mind. You will soon find that the costs of employing professionals to work on your new project takes a lot of money – unless they are shareholders… You also have the long list of licences, permits and approvals that you shall usually need to acquire. It can get to feel that you’re paying out a lot of money. But that is part of the cost of securing your financial future – this stuff is necessary, and it costs money.

It’s also true that when it comes to raising money from investors you have the costs of getting your business a top quality business plan, cashflow forecasts, and some basic modelling of the business to show that it’s robust and ‘bullet-proof’ in changeable conditions. There are also a few financing consultants who can guide you through the application process with an investor. If they are experienced and capable, they should know what the investor needs to feel safe investing in you and your project.

Without a good business plan you’re not going to get to face-to-face with the investor to make your pitch. Many would-be business developers then find that approaching an investment source costs money too. A broker should only charge for success – a commission at settlement of your financing.

Be wary, and check everything. Since the Global Financial Crisis a huge amount of capital has been destroyed – severely limiting the ability of banks and other financial institutions to fund investment. Be just as wary of the ‘famous names’ as you are of those you’ve never heard of… The company you approach may have been an active investor in the past, but check on how much they are currently investing…

However, an investor may also want to be paid for you lodging an application. This is valid – because they need to know who you are and whether you’re ‘credit-worthy’.

Investor due diligence costs you money – and it can be quite a lot of money. If the investor doesn’t live in your country, they shall want to have their people travelling to make on-site inspections, face-to-face interviews with everyone associated with the project. They have to. It’s unavoidable. If you’ve been working with good people, who can deliver, then they shall be working 12-16 hours a day on the due diligence, and avoiding partying and girls. The other sort you don’t want to be involved with…

Overall budget for the application process to be about 0.5% of what you’re seeking. So if you’re applying for US $50,000,000, that would involve costs of about US$250,000 in the whole process, application and investor due diligence.