Tax Credit Financing
We can help our creative and tech clients to cashflow their tax credit to create liquidity and improve their cashflow without having to give up equity in their business. We work with many specialist financiers with different budget appetites and have occasionally provided finance at the very smallest levels ourselves.
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All financiers will require an opinion letter (comfort letter) from a reputable media accountancy firm such as Affect. This opinion letter is addressed to the debt financier as well as the producer which means that Affect owes a duty of care to the financier as well and gives the amount of receivable due and likely timing of this. Finance can be provided both in relation to historic spend while claim is being prepared and processed by HMRC as well as on future forecast spend where have known revenue streams and outgoings.
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Indicative terms you might expect from a financier are:
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Loan amount of 80 - 90% of receivable amount
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Arrangement Fee of circa 3%
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Interest rate of 1.5% - 2.0% per calendar month
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Interest Reserve will be deducted from loan amount
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Legal fees will vary depending on size of loan and
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legal firm deducted from loan amount
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First shortfall position in the fiscal waterfall
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Opinion letter (comfort letter) required
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Charge at Companies House over the project.
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How Affect will help you
​Affect can help you access and optimise your tax credit financing by providing the following services:
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Looking at the timing of the tax credits and accelerating repayment by bringing-forward the period end
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Calculating the tax credit repayment available for each period
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Advising on which financiers might be best to approach for a loan
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Getting documentation in place which financier will require
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Preparing the all-important comfort letter (opinion letter) for the lender
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Liaising between the financier and company regarding any queries on the receivable amount
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Completing the tax credit claims when the time comes
Testimonials
We believe in building lasting relationships, which is why our clients are our biggest advocates.
You can see some of the projects we have worked on via our IMDb page.
"We’ve had the pleasure of working with Affect for the past few years, and the experience has been nothing but positive. Their deep industry knowledge, practical expertise, and consistently high level of customer support have made a real difference in our projects.
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They’re a great team to work with, and it's clear why they've been going strong for nearly 10 years and we look forward to continuing our partnership in the years ahead."
Phil White, CEO