YOUR COMPANY IS LOOKING FOR SR&ED FINANCING!
MAXIMIZE YOUR SR&ED TAX CREDIT BY FINANCING THE R&D INCENTIVE PROGRAM REFUNDABLE TAX CREDIT - GROWTH FUNDING 101!
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Financing & Cash flow are the biggest issues facing businesses today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
YOUR GUIDE TO SR&ED FINANCING - ACCESSING CAPITAL AND ACCELERATING CASH FLOW!
SRED tax credit finance loans eliminate the pain of... waiting... for your refundable tax credit under Canada's Scientific Research & Experimental Research program.
AVOID THE PITFALL OF GOVERNMENT R&D FUNDING ... WAITING!
SR ED financing can quickly and efficiently complete the cycle in your firm's R&D strategy. Let's dig in on an essential sr&ed guide.
WHAT IS THE SR&ED PROGRAM? YOUR SR&ED GUIDE
The Canadian SR&ED program (SR&ED Scientific Research and Experimental Development ) is categorically one of the most solid initiatives in helping the private sector finance economic growth. Given that in recent years the program has been scaled back a bit (less % credits = less refund cheque), the ability to maximize and monetize the total benefit of the program is key to better r&d cash management.
SRED IS A COMBINATION OF FEDERAL AND PROVINCIAL FUNDS
Remember also that the program is a combination of cooperation from both federal and provincial governments, depending on which province your firm originates. SR ED financing, by the way, finances both parts of the claim at the same time - federal and provincial.
WHAT IS A ' SR&ED CONSULTANT?
It goes without saying that your claim's actual quality is key in both initial approvals under the program and one consideration in financing approval. While the smallest percentage of firms still prepare their own claims (and in many cases are successful), the vast majority of refund claims are prepared by qualified independent SR& ED consultants. They may be associated with the large C.A. / Accounting firms for sr&ed credits accounting treatment, or are simply independent contractors in many cases.
While in the past, these consultants were ' behind the scenes, 'they are now clearly upfront, including being identified on your claim, as well as having to state their remuneration on claims preparation. (The majority of SR ED consultants prepare the sr ed claim on ' contingency ' - at their expense and time, choosing to take a % of the successful claim as their ' fee.' Their work in documenting your ' scientific or technological uncertainty ' is invaluable to businesses performing r&d for the investment tax credit sr ed refund.
LET 7 PARK AVENUE FINANCIAL DEMONSTRATE THE POWER OF CASH FLOW FINANCING YOUR SRED CLAIM
Since SRED Tax Credit Finance Loans are in effect short-term bridge loans, it makes total sense for business owners/managers to ensure their claim has taken advantage of govt offerings such as ' per claim ' approval. Naturally, any claim of good quality that doesn't even necessitate an audit is a good thing. Suffice to say; the govt is on record as saying that claims they consider ' high risk ' will be audited and scrutinized with more vigour.
Let's get back to basics - i.e. the financing of your claim. It's possible to receive financing approval in a matter of days based on a simple application process that identifies your firm, its business, a copy of your claim, and details on who prepared it.
YOU CAN PRE-FUND NEXT YEARS CLAIM FOR YOUR CRA TAX CREDITS
Business owners/managers always seem open to some good news - in the case of SR ED financing, it's good to know that claims can be financed even before final filing... and if that wasn't enough, next year's claim financing could commence almost immediately. That’s cash flow acceleration 101 under the sr ed claim process!
SR&ED LOANS ARE SHORT-TERM AND HAVE NO SET REPAYMENT
SR&ED loans are structured as short-term bridge loans - your company makes no payments for the loan duration. Loan advances are typically 75% of the total amount of your combined federal and provincial claim.
KEY TAKEAWAY - SR&ED FINANCING
Canadian businesses performing r&d can leverage financing that is non-dilutive in nature for refunds for refundable tax credits as well as grants.
Funding for an sr ed loan is fast and efficient and funding can be on completion and filing of a claim, or on a pre-filing advance funding basis. This helps smooth out the ' cash flow lumpiness ' in many early-stage and pre-revenue businesses engaging in r&d.
Funding sr&ed does not dilute owner equity and is cheaper than almost all other forms of alternative financing.
CONCLUSION - LET SR&ED FINANCING ALLOW YOU TO CAPITALIZE ON THE INVESTMENT TAX PROGRAM FOR YOUR R&D
Tax credits for research and development spending are a valuable part of any business that invests in r&d. If you're looking to eliminate a true business tragedy (waiting for a govt refund chq ! ), seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your r&d tax credit finance request. Let us make the SR&ED funding process easy and accessible for all Canadian companies.
FAQ:FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
What is SRED financing?
SR&ED tax credit financing is a financing solution that allows a company to access funding for the r&d sr&ed credit when the claim is filed with the Canada Revenue Agency/CRA, or, if the company chooses, in advance of filing the claim as the company accrues and documents its r&d under the sr&ed program offered by the federal and provincial government. Sr&ed L loans are short-term bridge loans, a type of ' innovation funding ', collateralized by the actual sred refund - Financing options include advance funding for claims not yet filed but accrued. The loan application process is very quick and usually takes only a few weeks from initial submission to funding.
What are the SR&ED tax incentives?
SR&ED tax incentives are government investment tax credits under a refundable tax credit which allows a company to conduct research and development in Canada - The tax incentive is in the form of a tax credit via a cash refund or in some cases a deduction against income. R&D Tax credits can be claimed by privately owned corporations or individuals.
What can be claimed on SRED?
Allowable expenditures for sr&ed in Canada include salaries and wages incurred under the research, as well as eligible deductions for materials and applicable overhead and third-party payments to contractors relative to the research - Companies must supply copies of supporting information that backs up the expenditures - Many businesses utilize third-party sr&ed consultants specializing in the preparation of valid claims which helps with risk mitigation around the success of a claim submission as well as potential help under an audit defence.
What are the SRED categories?
The categories for sr&ed tax credit calculation include 3 areas of focus under Canada's Scientific Research and Experimental Development program - basic research , applied research and experimental development.
What is the SR&ED program?
Canada's Scientific Research and Experimental Development (SR&ED) program is a government program that provides federal tax incentives to companies in Canada that assist a business in conducting r&d.
How can financing and loans help with SR&ED tax credits?
Financing sr&ed tax credits via short-term sr&ed bridge loans / sr ed loan helps a company fund r&d activities while helping the business maximize research efforts in scientific or technological advancement by providing a tax credit for certain eligible expenditures under this tax credit program.
What types of financing options are available for SR&ED?
Traditional financing options are typically not available for financing sr&ed tax credit claims - Canadian banks on balance do not fund these claims although the sr&ed credit is a government receivable. Firms that do not utilize sr&ed finance solutions are often forced to consider either additional equity options that are dilutive in nature as it relates to relinquishing additional ownership - Other forms of financing such as short-term working capital loans or merchant advance loans are very expensive - SR&ED loans allow a business to access funds that allow for additional funding at a very competitive cost/interest rate.
What are the eligibility criteria for SR&ED tax credits and loans?
SR&ED tax credit eligibility criteria for obtaining SR&ED tax credits include businesses being able to document eligible r&d activities around documenting their claim and adhering to reporting and filing requirements. Funding for sr&ed tax credits and loans is a very simple process which requires the company to supply basic information on the business, as well as a copy of the sred claim or accrued work to date.
How can I ensure that my company is taking full advantage of the SR&ED program and its financing options?
In order to maximize sr&ed claims and approval for the refundable tax credit canadian controlled private corporations must ensure they meet sr ed eligibility criteria as well as being able to document r&d work - typically this is more successful with the use of a third party sr&ed industry consultant specializing in claims and approval. Financing of a claim is handled with the use of a third-party finance professional such as 7 Park Avenue Financial.
It is important for claimants to realize the refunds are provided for qualified sr ed projects regarless of the final success and outcome of the r&d.
