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How to Finance Production Tax Credits in Film, Television and Digital Animation in Canada

Article by Stan Prokop

We read very recently that critics of film tax credit financing in the U.S. ( This was in Philadelphia ) felt strongly that the benefits of tax credit financing were negligible and did in fact not stimulate economic growth or tax revenue.We certainly don’t intent to weigh in on U.S. politics, but it seems very clear that the Canadian governments, both federal and provincial still strongly feel that the economic benefits of the recent tax credit increases over the last year or two in fact do bring in some cases a multiple of 5-10 times in financial benefits to the government. The bottom line is that film, television and digital animation credits in Canada are some of the most generous in the world, and these credits play an integral part in the financing of many productions in our aforementioned 3 key entertainment areas. In order to stay on top of film TV and digital animation financing it is necessary to understand key elements of tax credit financing in the Canadian environment. Financing of a production can be a daunting, frustrating, and complex journey. Ultimately you want to also ensure you have access to an experienced, credible and trusted financing advisor in this specialized area of finance.Two key strategies are most commonly used in tax credit financing – essentially the actual financing of a tax credit when it is certified and in fact filed, and, equally,or perhaps more popular, the financing of tax credits now on the assumption they will be certified and eligible for government financing. This 2nd process we have describe here could be called ‘accrual tax credit financing ‘.As a producer, director, or owner of a project (Perhaps you are all three?!) you want to ensure you interpret the different tax credits properly – that will allow you to maximize the financing you are eligible for.Most commonly use also want to set up a separate legal entity for each project, one that allows you to maintain specific and separate legal and financial records for that project.As unpopular it might be to focus on areas such as payment of taxes, keeping filings up to date, etc you must ultimately attend to these key issues as they are intrinsic to the proper financing of a tax credit. The financing of a tax credit is clearly one of the most innovative methods in which you can generate valuable cash flow and working capital for your production. In many cases other parts of your debt and equity financing will always come back to your ability to both generate tax credits, and even moreso, finance them in a timely and economical fashion. When you utilize a film finance tax strategy you are in effect helping to reduce part of the complexity of the film financing process. We can’t keep forgetting that our advice also refers to television and digital animation credits also. Monetizing your film tax credits demonstrates your ability to ensure you are exploring the latest trend in entertainment finance – While equity and banking credit are more challenging to obtain then ever the tax credit finance strategy clearly creates a win for all parties. It monetizes a great source of financing, and the fact that you are not giving up expensive equity or taking on additional leverage debt clearly makes for a positive financing strategy. No payments are made on tax credit financings, and your advance is ultimately set off against final receipt of government funds, which can be sometime in the future.

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P O Financing and Inventory Financing – Benefits… and Risks!

Article by Stan Prokop

In the old days Canadian business owners went to their bank for PO Financing and Inventory financing… no really, they did… yes really! Most companies now know that the financing of your inventory, purchase orders, contracts, etc is a formidable challenge in the Canadian business financing landscape.Simply speaking, your purchase orders, or inventory were collateralized by the bank and you borrowed against them. Therefore cash flow and working capital that was in effect tied up, or rather invested in your inventory and contracts was monetized, and you had the ability to draw down against those dollars.Well the business financing landscape changed – yet your firm still has inventory, you have growth needs, and you need the financing to drive that growth into sales and profits. If you can acquire inventory financing then the ability to borrow against that inventory and purchase order is a key benefit.So if the banks aren’t really that into inventory and p.o. financing in Canada, then who is. Well the reality is that it’s done via a select and specialized group of private finance firms who have a total knowledge and focus on the value of your inventory, and furthermore usually carry significant knowledge about your industry and the overall business model you operate in. You should approach inventory financing with a positive attitude – by that we mean that your presentation for the financing should focus around the positive aspects of your business – those should include inventory turns, marketability of your product, and, very importantly, the gross margins associated with your business. We can categorically say that businesses with very low thin margins are not the best candidates for inventory and PO financing, simply because the financing costs around this type of financing chip away significantly at those final remaining profits. We mentioned in our title that you should be cognizant of the risks associated with inventory financing – by all means don’t consider the financing of out of date of very slow moving or unsaleable stock – this quite frankly will be viewed simply as a ‘ cash grab ‘ that doesn’t make sense. You will obtain a better inventory financing and p.o financing deal if you have good controls on your products – that typically might include a perpetual inventory accounting Clients always ask if there are any special tips or tricks around the financing proposals around p.o and inventory financing. We tend to focus on the basics, which always work – a listing, or preferably an appraisal of your inventory – updated financials, copies of pertinent purchase orders or contracts, and a business plan or cash flow forecast. The bottom line is that 9 out of 10 financiers have never even heard of p.o financing or inventory financing, so seek the services of a trusted, credible and experienced advisor in this area to assist you in putting the right type of facility in place. An experienced advisor in this area will help you avoid some of the potential risk, pitfalls, and financial ‘damage’ associated with inventory and p.o financing gone awry. They might include higher than market rates, requests for additional hard collateral, locked in contracts you can’t get out of, or inordinate appraisal and inventory count costs.If you are successful in avoiding those risk the benefits will clearly be obvious – the ability to grow sales with unlimited financing of new sales or contracts, quick turn around for approval, and cash flow benefits derived from your suppliers being paid directly by the finance firm. Additionally you may be in a position to negotiate better pricing on products, thereby improving those gross margins we talk about.PO and inventory financing, its all about risk and reward – understand those risks, seek an expert to minimize them, and reap the benefits of increased sales and profit growth.

David Gueterman with Foundation Financial Group gives year-end tax deduction suggestions as the year 2011 comes to a close.

Improve Your Business Finances

Managing your business finances can be stressful and time consuming. Doing the following will work wonders.

1. Store your bills in one place

Be consistent with where you store these. Misplacing bills can cause you to waste time looking for them. Time is money. Set up a suitable means bearing in mind the amount of mail you receive.

2. Plan to pay your bills on schedule

Set up a schedule to pay your bills at set times each month. It is worth time doing this rather than simply paying just as you receive them. Check how much time is allowed to avoid late payment.

3. Examine your credit card statements

Examine how much interest you are paying. Watch out for increases. If you get transaction fees or your interest rate rises, check with your credit card company. If necessary switch to someone else for a better rate.

4.

Use automatic payments

Most banks offer automatic payments to your creditors. Some creditors will give reductions if one agrees to sign up for these. Keep track of these and record the deductions. This can help save time and effort.

5. Go digital with your Checkbook

There are a number of computer programs that can make the process easy for you. These include Microsoft Money and other similar ones. They make your payments and reconciliations easy. Computer checks can be ordered and will fit into most printers. Your software can automatically record all your transactions. Many banks have links to the software and deposits and withdrawals are taken care of. Also when it comes to do your taxes, it is so much easier.

6. Get protection for overdrafts

Most banks can offer a service, where if you were in danger of bouncing a check, money can be taken from another source for example a credit card or savings account.

They can arrange this service for a nominal fee.

7. Cancel your unused accounts

If you have any accounts such as bank or credit card that you are not using, arrange to cancel them. This will improve your credit score. Avoid being enticed into opening new accounts, by low interest rates or discounted prices.

8. Consolidating

If you have a number of credit card accounts with balances outstanding, try consolidating them into a single combined one. Take care with transfer fees. Also if you have other kinds of accounts like savings, IRA’s or mutual funds consider consolidating these too. Keeping your money in fewer places can make life easier.

9. Put money aside

Consider setting up regular deductions from bank accounts automatically, into a savings fund. Avoid touching this. Over a period of time, this can generate substantial funds.

10. Sort out your files

Go through your files from time to time and dispose of old receipts and bills that you no longer need. Check with your IRS office for details of how long you should keep them.

As the eurozone crisis continues, could the options on the table include a German takeover? A leaked document from Germany’s foreign ministry reportedly reveals the country may be preparing for a new European fund that will be able to take over the economies of struggling eurozone countries. Meanwhile, we know regulators have been trying to figure out what happened to the 0 million dollars missing from customers of MF global. And they now suspect at least some of that cash may not be missing, it may be gone. Regulators suspect it may have been used to cover trading losses at the firm that has, of course, now declared bankruptcy. The question remains as to whether more customers will react like Gerald Celente who we talked to this week and created a new interpretation of what MF really stands for. And from working on Wall Street to Occupying Wall Street, we’ll talk to Max Keiser on his evolution from broker to leader of the so-called global insurrection against banker occupation. And with 75000 layoffs expected on Wall Street, will we see more bankers join the fight? To watch more visit us @ www.youtube.com

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Property Development Finance: Australia

Property Development Finance includes the construction of new buildings, refurbishing existing buildings, as well as land subdivisions and is considered to be the most complex area in property finance.

If you are planning a property development project then you are best advised to seek the services of an experienced commercial finance broker as opposed to a standard residential mortgage broker. A good commercial finance broker will have experience in structuring construction loans and can facilitate property development finance for land subdivisions, residential, commercial, office, industrial, retail and hospitality orientated property developments throughout Australia. They will be able to give you advice, information and guide you through the entire application process.

Perhaps more importantly they will have a far greater knowledge, range of appropriate lenders and industry contacts than an individual developer would have. Using their knowledge and contacts they will be able to analyse your specific requirement and in turn structure a suitable funding package which would be the best fit for your project.

Property Development Finance can be structured in many ways, tailored to the specific needs of the project. Typical development funding structures fall into two main categories; Total Development Cost (TDC) based facilities and Gross Realisation Value (GRV) based facilities.

Total Development Cost (TDC) finance is based as a percentage of costs associated with the development such as land purchase, construction costs, professional fees, marketing costs, stamp duty, interest and so on.

Generally the maximum loan amount is 80% of Total Development Costs (TDC). This type of loan is normally offered by institutional lenders such as banks and super funds and is also the cheapest development finance option. The downside is that it the most difficult to obtain as the lenders require full financials and presales.

Gross Realisation Value (GRV) finance is based on a percentage of the projects end value upon completion with a maximum loan amount up to 70% of Gross Realisable Value (GRV). This type of loan is generally offered by private non-bank lenders and as a result can be much more flexible as these style of lenders have a more relaxed requirement for presales and financial information.

Additional Property development finance facilities:

Mezzanine facilities which bridges the gap between Senior Debt and the developers’ equity

Equity participation where the developer has insufficient equity to successfully finance the project

Land Bank finance for land to be held for construction at a future stage

Take-out facilities of residual stock to repay construction loans, release equity or to allow for an extended selling time

Joint Ventures with experienced property developers

The actual application process for property development finance can be logistically demanding, and is once again, best left in the hands of your commercial finance broker, who becomes your intermediary and point of contact with the lenders, and will keep you fully informed of events as they transpire. Your finance broker will also be on hand to help you confront and resolve any issues that may occur during the application process.

Applying and being accepted for property development finance is arguably one of the most stressful and time consuming forms of finance to tackle and it is definitely worth investing in the services of a professional to streamline the entire process.

Bill Salouris is the Director of Sales at who is Global capital commercial facilitator specialising in property finance, Commercial Loans, & property development finance.

What is Seller Financing?

When a seller allows a buyer to make payments over time for the purchase of property, it is known as owner financing or seller financing. This private financing by the seller can take the place of a bank loan or be in addition to a conventional mortgage.

The payment amount, interest rate, and other terms are agreed upon between the buyer and seller. The amount financed by the seller will depend upon the buyer’s down payment and whether there are any bank loans.

Here’s an example of how it works…

An owner advertises his or her house for sale, either on their own or through a real estate agent. A buyer makes an offer, and they agree upon a sales price of $ 175,000 with a 10 percent down payment of $ 17,500.

Rather than requiring the buyer to obtain a bank loan, the seller carries back the balance of $ 157,500 in the form of a note and mortgage.

  It could also be a note and deed of trust or a real estate contract, depending on the customary documents for that state. A title company or real estate attorney is often used for the closing.

The note spells out the terms of repayment. In this case they agree upon 8.5 percent interest at $ 1,211.04 per month based on a 360-month amortization. The seller doesn’t really want to wait a full 30 years for payments, so the note requires payment in full, known as a balloon payment, within seven years.

Because the buyer is making payments to the seller rather than an institutional lender, the legal arrangement is called a private mortgage, seller carry-back, or installment sale. The seller has similar mortgage rights as a bank, so if the buyer does not make payments, the seller can foreclose and take the property back.

Should the seller prefer cash today rather than payments over time, the rights to future payments can be sold or assigned to a note investor on the secondary market.

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Are You Considering Re-Financing

Article by Jose Galeano Perez

Are You Considering Re-Financing?

Homeowners who are considering re-financing their home may have a wealth of options available to them. However, these same homeowners may find themselves feeling overwhelmed by this wealth of options. This process doesn’t have to be so difficult though. Homeowners can greatly assist themselves in the process by taking a few simple steps. First the homeowner should determine his refinancing goals. Next the homeowner should consult with a re-financing expert and finally the homeowner should be aware that re-financing is not always the best solution.

Determine Your Goals for Re-Financing

The first step in any re-financing process should be for the homeowner to determine his goals and why he is considering re-financing. There are many different answers to this question and none of the answers are necessarily right or wrong. The most important thing is that the homeowner is making a decision which helps him achieve his financial goals. While there are no right or wrong answer to why re-financing should be considered there are, however, certain reasons for re-financing which are very common. These reasons include:

* Reducing monthly mortgage payments* Consolidating existing debts* Reducing the amount of interest paid over the course of the loan* Repaying the loan quicker* Gaining equity quicker

Although the reasons listed above are not the only reason homeowners might consider re-financing, they are some of the most popular reasons. They are included in this article for the purpose of getting the reader thinking. The reader may find their mortgage re-financing strategy fits into one of the above goals or they may have a completely different reason for wanting to re-finance. The reason for wanting to re-finance is not as important as determining this reason. This is because a homeowner, or even a financial advisor, will have a difficult time determining the best re-financing option for a homeowner if he does not know the goals of the homeowner.

Consult with a Re-Financing Expert

Once a homeowner has figured out why they want to re-finance, the homeowner should consider meeting with a re-financing expert to determine the best refinancing strategy. This will likely be a strategy which is financially sound but is also still geared to meeting the needs of the homeowner.

Homeowners who feel as though they are particularly well versed in the subject of re-financing might consider skipping the option of consulting with a re-financing expert. However, this is not recommended because even the most educated homeowner may not be aware of the newest re-financing options being offered by lenders.

While not understanding all the options may not seem like a big deal, it can have a significant impact. Homeowners may not even be aware of mistakes they are making but they may here of friends who re-financed under similar conditions and receive more favorable terms. Hearing these scenarios can be quite disheartening for some homeowners especially if they could have saved considerably more while re-financing.

Consider Not Re-Financing as a Viable Option

Homeowners who are considering re-financing may realize the importance of evaluating a number of different re-financing options to determine which option is best but these same homeowners may not realize they should also carefully consider not re-financing as an option. This is often referred to as the “do nothing” option because it refers to the conditions which will exist if the homeowner does not make a change in their mortgage situation.

For each re-financing option considered, the homeowner should determine the estimated monthly payment, amount of interest paid during the course of the loan, year in which the loan will be fully repaid and the amount of time the homeowner will have to remain in the home to recoup closing costs associated with re-financing. Homeowners should also determine these values for the current mortgage. This can be very helpful for comparison purposes. Homeowners can compare these results and often the best option is quite clear from these numeric calculations. However, if the analysis does not yield a clear cut answer, the homeowner may have to evaluate secondary characteristics to make the best possible decision. http://paydotcom.net/r/12974/andres4/26554466/