YOUR COMPANY IS LOOKING FOR SR&ED FINANCE!
SR&ED FINANCING IS A SMART SOURCE OF GROWTH FINANCING
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.comfi
FINANCE YOUR SR&ED REFUNDABLE TAX CREDITS
A SRED financing tax credit loan is a great example of the good news around Canada's SR&ED program for eligible companies.
If there's any 'bad news it’s around the fact that once again some industry pundits are again wondering about the true benefit to Canada under its current ‘Scientific Research & Experimental Development (aka 'SR&ED'!) program.
SRED CANADA is Canada's premier refundable tax credit. Scientific Research and Experimental Development Tax Incentive Program financing allows you to access capital and help fund your r&d capital requirements through solid cash management and a funding timeline beneficial to business owners.
LOOKING TO ACCELERATE GOVERNMENT FUNDING UNDER SR&ED - GROWTH FUNDING 101!
At 7 Park Avenue Financial a new client may inquire - What is Sred financing?
Simply speaking sr&ed debt financing allows a business to capitalize on their SR&ED claim for the refundable tax credit via a loan advance prior to receiving the government refund - That claim is for all intents and purposes an account receivable of your business and the SRED cliam is the collaeral for the sr&ed funding.
Eligible expenditures such as employee salaries / contact payments and the consultant write up on your technical challenges validate your loan via the improvements you have made on existing technology or processes. Receiving your refund before you file the claim is also possible , via cash advances against accredud sr&ed tax credits .
The bottom line - your waiting for the refund is eliminated!
WHO QUALIFIED FOR SR&ED FINANCE?
Canadian provinces also partner with the program, providing additional assistance. SR&ED (Scientific Research and Experimental Development) Program is the flagship investment incentive program created by the Canadian government via tax credits. SR&ED tax credits are paid after your annual income tax return, aka the ' T2" has been filed together with the T661 year-end filing.
It provides financial support to Canadian companies that are involved in creating new or improving existing technologies, with the aim of stimulating scientific advancement in the country. Most provinces have their own programs to encourage scientific R&D, which provides supplemental assistance to SR&ED claimants.
Although many Canadian businesses are technology related you don't have to be in a tech environment to be involved in r&d activity.
HOW ARE SR&ED CLAIMS PAID?
As one of the best of its kind in the world, many countries have followed Canada’s lead in setting up similar programs. It also makes it even more important to realize the quick and efficient cash recapture of your R&D capital investment via the help of an SR&ED finance consultant for sr&ed documentation requirements. Let's dig in.
While thousands of firms are still aggressively planning to file claims via their SR&ED consultant for their non-repayable tax credit refund, just as many might be wondering if financing that claim is still valid and accessible. The answer - a resounding yes!
While some business owners might view the program as a bit of ' danger and complexity ' that's definitely not the SRED loan process - which is, to put it simply - easy! We're the first to admit that properly preparing and submitting a claim is not for newbies and the weak of heart. Never has been your ability to prepare a proper claim, with proper assistance more important. The 1400 words and 3 questions you are required to address have never seemed more important.
Statistics in recent years show that over 20,000 claims annually if not more are filed by firms just like yours. And as a note from our view in the trenches, all of those firms still view that tax credit claim as a key, if not a major source of financing for their firm. It's the private companies in the SME ( small to medium enterprise ) sector that file the majority of those claims. For more info on the dollars invested by the government in SRED click here.
That cash flow, when received allows them to do a number of things, including furthering additional R&D, starting or furthering revenue and marketing, and by virtue of that SR&ED work maintaining their particular dominance in their niche. The program has been around for over 30 years now and understanding the rules and the 'culture' around SR&ED is important.
Again, we'll leave that to the experts, pundits, and oh my god the politicians to assess the benefits and historical culture/perspective around SR&ED - We'll focus instead on the monetizing of those claims into real cash flow and working capital.
WHY SR&ED FINANCING VIA A SR&ED LOAN
If your company has addressed technological challenges and invested in R&D and has filed a SRED claim you are eligible for SR&ED funding. Your SRED financing can take one of two forms in Canada.
WHEN CAN YOU ACCESS SRED FUNDING?
You can cash flow your claim anytime, immediately after you file it, or alternatively (with a bit of a track record behind you) you can finance your claim on an accrual basis. The accrual concept is becoming increasingly popular as it simply fast tracks cash flow re your R&D capital spend.
In essence, you're recovering a portion of your R&D as you spend on it. That's a solid business premise as most Canadian business owners and financial managers would agree. SRED finance is agnostic to who prepares your claim, if, and it's a pretty basic if, your claim is prepared by a bona fide SR&ED consultant with some level of credentials and expertise. As the majority of SRED consultants seem to work on contingency naturally they are in some ways more at risk than your firm, so it's quite easy via references to find a suitable party to submit your claim.
It's these consultants that address key issues such as technical policies, claim eligibility, expenditures qualifying, etc. Looking for something simpler in the whole SR&ED process? The actual financing of your tax credit! Simple, as we stated. We explain to clients that they should view the process as a standard business application that is secured by the tax credit claim itself.
HOW DOES SRED FINANCING AND THE ' SR&ED ' LOAN R&D TAX CREDIT WORK?
Other key aspects of SRED financing? The basics are as follows: 70% loan to value funding for your filed claim. Typically no payments are made during the duration of the loan, and final adjustments are made at government finalization, returning to your firm the balance of 30% less financing costs. Accrual financing for your tax credit claim might be funded at a lower loan to value.
5 KEY FACTS ABOUT THE SR&ED PROGRAM / SR&ED ELIGIBILITY - DOES YOUR CANADIAN COMPANY QUALIFY?
1. Almost any company, including start ups , can participate in the program - Scientific, medical, and technological industries all participate. As long as your work is under eligibility criteria you will be allowed a claim and refund at your fiscal year-end filing.
There are no limitations on claim size. Although thousands of businesses utilize the program there is a common misconception that some r&d efforts don't qualify industries - All industries qualify.
2. The program is all about advancing scientific and business knowledge and improving on those processes and products we mentioned previously
3. Many businesses are surprised to hear that the research you do does not ultimately have to be successful ( hopefully it will be ) so success is not part of your refund eligibility
4. Companies, with the help of their SRED CONSULTANT around sr&ed credits accounting treatment have to only show their work in enhancing current knowledge levels and how they undertook to face technological challenges via proper documentation of technical content under the CRA Sr&ed guide
5. At 7 Park Avenue Financial, we work with many firms that file year after year, as well as first-time applicants. Even firms that have filed unsuccessfully in the past can file. More Information on the SRED Tax Credit Program financing solution is available from our team anytime.
CONCLUSION - DON'T MISS OUT ON SR&ED TAX PROGRAM FINANCING SOLUTIONS
Your company should consider the SR&ED credit program and financing your claim if you want your firm's share of the Billions of dollars that the government pays out annually. In fact, well over 20,000 companies in Canada participate in the program every year! At 7 Park Avenue Financial, we tell clients that the SR&ED program, along with the GOVERNMENT OF CANADA SMALL BUSINESS LOAN program are two of the best government-related programs in business.
Make your business one of the thousands of businesses in Canada every year that access SR&ED Financing. Over 3 Billion dollars in refunds are processed annually and accessing strategic capital prior to government funding eliminates the waiting game that can take months and sometimes up to a year. Accessing the working capital and cash flow you earned under SRED provides maximum control over your business, and this financing is non dilutive -
The Canada Government guaranteed loan program is often called the 'SBL LOAN' while SR&ED refers to sr&ed refundable tax credits that can be also financed to accelerate cash flow.
Speak to a trusted, credible, and experienced Canadian business financing advisor and sr ed finance consultant who can assist you with your tax credit finance loan today. Think of that person as part of your total SR&ED process! We'll identify your streamlined process for quick funding. Talk to us about Sred financing tax credit sr ed finance for your firm as a smarter source of growth and an alternative to debt financing.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK/ MORE INFORMATION
WHAT IS SR&ED
Canada's non-refundable tax credit program involving your investment in r&d capital is called the SR&ED program. Most business folks refer to it as 'SRED' and the government term is actually SR&ED (Scientific Research and Experimental Development) Program. It provides financing for sr ed tax incentives to support Canadian firms such as yours who invest in new processes and technologies to advance business and science via the sr&ed claim process.
What is Sred financing?
A lump sum advance on your sr&ed claim can be accessed in a manner of two weeks - Which allows a business to manage cash flow challenges that come with early stages of growth - Having access to those claim funds in advance has significant advantages to the business.
Certain grant and investment tax credit ( ITC) funding is also available for many programs through the same accrued sr ed credit process.
SR&ED finance funding allows Canadian businesses to utilize their refundable tax credits without waiting for the for federal government and province to provide the sr&ed refund. Companies must ensure they qualify for sred credits.
USEFUL INFORMATION:
The Canadian government has been supporting scientific research through refundable tax credits and tax deductions going back to 1944. This tax incentive became the SR&ED program and is now one of the most reliable methods of recapturing r&d investments which are in effect a government account receivable for your company
Are SRED credits refundable?
Canadian privately controlled corporations can cliam qualified r&d expenditures under the SRED program sponsored by Canada Revenue Agency - Canadian Foreign owned firms can also claim sr&ed
What qualifies for Sred?
Any business that advances research and development for work focused on the achievement of scientific or technological advancement in new or existing technologies can qualify for a SR&ED refundable tax credit - Foreign contolled and canadian controlled businesses can earn credits on qualified spend in r&d - those credits can come in the form of refundable cash or in some cases reduction in taxes owing.
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How do I submit a claim to SR&ED?
Companies claiming sred credits file with CRA/Canada Revenue Agency via form T6661 and must adhere to the expenditures earned under program guidelines, as well as the year end reporting deadline.
Click here for the business finance track record of 7 Park Avenue Financial
