SR&ED Finance Loans Ensure Your Cash Flow Refund Arrives Now!
SR&ED Financing Makes Your R&D Capital Investment More ‘Efficient‘! Why? Cash Today!
YOUR COMPANY IS LOOKING FOR SRED FINANCING - SR&ED LOANS IN CANADA!
GROWTH FUNDING VIA SR&ED FINANCE SOLUTIONS FOR CANADIAN COMPANIES
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Financing & Cash flow are the biggest issues facing businesses today
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SRED TAX CREDIT FINANCING
SRED Financing allows immediate cash flow and working capital advantage of your SR&ED tax credit claim. This program is, bar none, the best tax incentive program in Canada. Other than being taxable as income the refund you receive from the government is a non-repayable credit. Could sr&ed tax incentives get any better?
Yes, they are financeable! Many start-ups and emerging technology companies use the program - Let's dig in!
WHAT IS SRED FINANCING AND HOW IT CAN BE USEFUL TO YOUR BUSINESS!
Canada's Government ' SRED' program is formally known as the Scientific Research and Experimental Development (SR&ED) tax incentive, providing Billions of dollars annually to allow Canadian businesses in every industry segment, allowing firms to conduct r&d - start-ups , pre-revenue and larger established businesses take advantage of the sred tax incentives. This is a refundable tax credit which encourages businesses to access SRED LOANS under their qualified credits.
To qualify for credits a company must demonstrate investigations and experiments in Canada that would allow the business to achieve some level of advancement in their technology, products and processes.
At that point, the company files their claim under form T661 along with their Canada Revenue Agency / 'CRA' annual tax filing and financial statement preparation
SR&ED FUNDING FINANCE SOLUTIONS - A BETTER WAY TO FUND R&D
Looking for some irony? Top experts tell us that 70% of companies in Canada that are eligible for the program do not even apply, let alone receive their funds!!
It clearly is a source of untapped cash flow and working capital for your Canadian business that should be maximized to the hilt.
The other 30% of Canadian firms who use the program utilize it around their efforts to develop new products and services, build prototypes, and solve technological challenges.
So your Canadian-controlled private company utilizes and files SRED filings. Did you know your claim can be financed immediately after you file it, almost the same day ? ! and in most instances even prior to filing?!
Specialists that work as SR&ED consultants are experts in preparing your claim and in Canada, your SRED claim can be prepared at typical accounting costs or on a contingency fee basis with no risk to your firm.
The expertise of your consultant is critical as Ottawa is getting more 'stringent'. For the record over 24,000 firms, some of whom might be your competitors, filed last year. Total refunds: 3.5 Billion dollars! The lesson learned? Ensure you're eligible for SRED, and start your process early.
However most Canadian business owners and their SRED consultants do not know that your claim can be financed, either during the preparation of your claim, (yes, before your file, if you qualify!) or immediately on the filing of your claim.
HOW IS SR&ED FINANCING USEFUL TO YOUR BUSINESS
Sr&ed finance solutions will of course allow your business to fund even more r&d activity. Talk to the 7 Park Avenue Financial team about what loan structure or SR&ED line of credit type facility works for your firm. Financing is very competitive given that no external collateral is required. Solutions offered by 7 Park Avenue Financial to our SRED clients also require no personal guarantee.
The collateral for the loan? You guessed it - your SR&ED claim!
Given that your investment in r&d is a long-term investment and capital commitment sred financing helps business owners/financial managers make that commitment to their business.
While financing received under a SRED LOAN can be used for general corporate purposes most firms use funds to hire staff, retain sr&ed consultants for their application, or fund materials required in their research and development needs. When products are finally commercialized funds can be used to accelerate products to market and justify your commitment to using sr&ed tax credits.
HOW SRED FINANCING WORKS - The SR&ED LENDING PROCESS
Generally, with this type of financing, you receive immediately approximately 75% of the value of your claim. The other 30% still comes back to you of course, but it’s simply a bit of a buffer to cover financing costs and any risk that a portion of the claim will be disallowed or clawed back.
The SR ED financing process? Simple - not complicated. Complete a basic business financing application, ensuring proper backup is in place and valid. That includes info on your company, the R&D claim itself, your previous SRED claims if you have filed previously etc.
The reality is that SR ED financing can be completed within 2-3 weeks of starting the process. The beauty of this type of financing is that no payments are made on the SRED loan. In effect, you can say that you have factored or discounted the SRED claim. Refunds are for any purpose: reduction of payables, investments in new equipment, additional staff, etc. Bottom line = any general worthwhile corporate purpose.
Grant financing is also available under similar loan structures
SR&ED credits are tax incentives your firm should be taking advantage of under federal refundable tax incentives
SRED financing complements your work in r&d
CRA administers the program and provides the qualifications you require to be eligible under the program - most firms use third-party consultants with expertise in their firm's area of expertise - These efforts help maximize claim size and ensure write-ups that accompany your filing show proper levels of experimentation around the technical challenge to the business they are trying to solve
Typical costs under SRED work include wages, payments to contractors and the cost of materials
SRED Loans free up cash flows that the business might otherwise need to run day-to-day operations
Many third-party consultants work on a contingency basis, preparing write-ups at their own risk - Some professional qualified accountants in many firms also specialize in Sr&ed
CONCLUSION - SR&ED TAX CREDIT & GRANT FINANCING
Know your SRED loan financing options. Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor in SRED Funding who can help you fund your SR&ED tax credit and financing needs. Don't forget claims can be financed as you accrue your spending prior to filing if you wish - accessing your refund before claims are filed is cash flow 101 when you pre-finance your SR&ED!
FAQ FREQUENTLY ASKED QUESTIONS MORE INFORMATION
What is the SR&ED Program
The SR ED investment tax credit is a federal tax incentive program that allows companies to file sr ed claims in order to receive an sr ed refund. If a company qualified for their work around scientific or technological advancement and combatting technical challenges in their business or industry in areas such as science, software development, etc - Claims are required to be filed at the fiscal year end of the business.
Those same eligible companies that can document that technological uncertainty often utilize third-party sr ed experts, known as sr ed consultants, with expertise in their industry or area of work - utilizing SR ED consultants can be a cost-effective way to increase claim size around qualified expenditure and technical content which includes employee salaries related to the research. Many businesses in Canada are unaware they qualify for sr ed.
SR ED Financing allows companies to cash flow their government receivables, i.e. the sr&ed claim. The sr ed loan is a short term bridge financing loan allowing for better cash management under the program processes and funding timeline.
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Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil