Sr&ed Credits – How To Finance Your Claim for Immediate Cash Flow

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You Don't Need a Horoscope To Determine When your SR&ED Credit Will Arrive - Finance Your Claim and You'll
Have Your Refund In A Very Short Period Of Time

Information on financing SR&ED credits under Canada's research & development refundable tax credit program. Maximizing your r&d capital investment via quick efficient cash flow financing of your claim is a strategic priority for many companies

Canadian business owners and financial manager who file for sred credits are often not aware that these claims can be financed in order to generate working capital and cash flow out of the claim. They are even more surprised to hear that it is actually possible under most conditions to obtain financing even prior to financing the claim.

What could be a better working capital and cash flow strategy than getting immediate cash flow for a government grant that is non repayable? We frankly can think of no other risk free way to bring valuable cash funds into your company if you are utilizing this great government program.

Let’s establish some bedrock around what we are talking about. The program formal name of course is the Scientific Research and Experimental Development aka ‘(SR&ED) ‘program that is funded by the federal and provincial governments. Each SRED claim has a federal and provincial portion, and, combined, they provided you with a non- repayable tax credit for a significant amount of the funds you spend on qualifying R&D and business processes.



Many clients we work with have their claims prepared on a contingency basis – that simply is letting someone else , known as a sred consultant , prepare you claim and letting them absorb all ( yes all ) of the cost of that claim . When you finance a sred claim you can actually arrange to have the sred consultant paid at the same time also.



SRED claims continue to be on the rise in Canada, and when you couple the filing of those claims with a somewhat challenging financial environment for business financing you have a perfect storm, so to speak, for the consideration of financing your claim.



The financing of sred claims is the ultimate ‘boutique ‘financing business in Canada. We urge clients to work with a business financing advisor who can ensure they are receivable maximum funds and market rates, terms and structures for the amount of the claim.



Clients want to know how ‘complex ‘a sred financing is. The reality is that you should view a sred tax credit financing in exactly the same manner as any business financing, other than to understand perhaps that the main collateral on the sred loan is really the claim itself. We use the word ‘sred loan ‘but in reality the sred financing brings no debt to the balance sheet – you are simply monetizing your claim for cash flow and working capital now.



The essence of the entire process can be simply described under the following process



Sred financing application

Due diligence

Legal/documentation of loan

Funding!!



It’s as simple as that, and we advise most clients the entire process can be completed within a few weeks, which is standard for most business financings anyways.



You would only want to consider sred financing if in fact you don’t want to way from 1-12 months, (sometimes longer) for your grant cheque from the government. As a Canadian business that is growing you probably have much better uses of those funds now, including reducing payables, investing in even more r&d, acquiring new business assets, etc .



Consider sred tax credit financing as one more toolkit you have in your overall business strategy. Work with an expert and maximize the amount of your return and the overall most effective use of that essentially free cash flow and working capital.




7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Receivable Factoring – The Two Things You Need to Know !

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We're Looking Inside the Box on Canadian Receivable Financing- Here's What We Found!

Information on A/R Financing Solutions In Canada

Canadian business owners and financial managers can make some big, painful, expensive and time consuming mistakes when they choose the wrong factoring facility.  In a previous article we highlight three popular misconceptions about factoring – they were:

-Factoring is the pledging of receivables

- Factoring is expensive

- All receivable financing services and facilities are essentially the same

We provided information that clearly showed that there are a number of fallacies and myths about the factoring of receivables in Canada, and that the prudent business owner needs to investigate the true costs and ‘how to’ of factoring in Canada.
Let’s now share two other major misconceptions around this method of business financing in Canada. They are as follows:

• Factoring is very intrusive to my customers and suppliers (NOT NECESSARILY!)

• All factoring companies are essentially the same (WRONG!)

Before we examine these two popular business misconceptions lets take a very brief step back and recap what receivable factoring is.

Canadian business, more than ever, needs cash flow and working capital to survive. Many traditional sources have either disappeared, dried up, so to speak, or simply are not available in the current business climate. Primarily we are of course referring to generous bank lines of credit for receivables and inventory. Business must go on, so how do business owners resolve these temporary cash crunches. One alternative is factoring.

The other alternative is a term loan, which has fixed payments, and generally extends for a period of three to five years. So the business owner must decide whether to focus on short term working capital – i.e. a factoring solution, or permanent working capital via a term loan or more owner equity.
So now let’s debunk out two myths surround factoring.

In a traditional what we will call the U.S. model of factoring we will agree that factoring, otherwise known as receivable discounting is in fact intrusive. The factor firm has the ability to in essence take control of your entire receivables function, including invoicing your customers with notification from themselves, dunning letters and calls for collection, and the insistence of payments being made directly to their firm. Is this intrusive – we certainly think so.

 Is this the only alternative for Canadian business – absolutely not? Prudent business owners will seek the advice of an experienced, trusted, and credible advisor in business financing who will structure a facility that allows them to collect their own receivables. Under this scenario they will reap the benefits of factoring ( Immediate cash, increased working capital ) while at the same time preserving customer good will . So the bottom line is, yes, if you enter into the wrong type of facility, factoring will be deemed intrusive, but you have options and you should investigate those with professional assistance.


Now let’s cover our final misconception – ‘all factoring firms are the same’. The reality is that if you are not an expert in this unique form of business financing then you can probably be forgiven for having talked to a few firms and drawn the conclusion they have the same product and service offering. The reality – Nothing could be further from the truth. Factor firms in Canada are sorted by geography, ownership (many are just branches of U.S. and U.K.operations) their own capital and borrowing structure, and, most importantly, how they do business on a day to day with you and your customers.

When we talk to clients about factoring solutions we recommend they focus on firms that have a nominal holdback, competitive rates, and , most importantly, are comfortable in allowing you to do your own billing and collecting . Naturally at the same time you are in a position to reap the key benefits of receivable financing, which is cash flow and working capital leverage you did not have.


Talk to an expert, sort out the good from the not so good, and focus on a receivable financing facility that meets your cash flow and growth needs. That’s solid business financing.




7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

 http://www.7parkavenuefinancial.com

 Business financing for  Canadian Firms  , specializing in working capital, cash flow,   asset based financing ,  Equipment Leasing ,  franchise finance and Cdn.  Tax Credit Finance .  Founded  2004  - Completed in excess of 100  Million $  of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
 Prior to founding 7 Park Avenue Financial in 2004  his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980)  DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 )   He is an expert in Canadian Business Financing.

Stan has over 40  years of business and finance executive experience. He  has been recognized as a  credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had  in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He  has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Benefits of a Commercial Equipment Lease for Canadian Business

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The Business Of Financing Assets For Your Company

Information on the benefits of commercial equipment lease financing in Canada

Canadian business owners and financial managers are constantly challenged to come up with financing alternatives for both working capital and the asset acquisition.


Let's focus on why a commercial equipment lease provides your firm with some of the best financing benefits and alternatives. In order to be successful in financing equipment it is important to know several key things - we can summarize those in a few critical categories:

- Understanding what lease company is the best fit for your firm

- Focusing on what benefits are important to you in an asset acquisition

- You must have the ability to de-mystify lease pricing and rates and structures to ensure you are getting a competitive market rate and structure


When you make the equipment asset purchase decision you are always faced with what is known as the ' lease vs. buy ' scenario. We don’t intend to make out information shared here an accounting lesson, but either using a lease vs. buy calculator or template, or, even better, speaking to your accountant you can easily come up with a rudimentary analysis of what the best financing option is . If it is lease financing then you are ready to move forward.


We talked about our critical point # 1 - which is simply to understand who your best lessor might be. The factors that determine this might seem like common sense - they are: The type of asset you are acquiring, the dollar value of the asset, and the overall credit quality of your firm you are in a position to focus on the firms that finance this type of asset.


The good news is that there are hundreds of lease financing sources in Canada - the flip side of that coin is that you might not have the time to invest in speaking to 100 different firms.


In most cases in makes a lot of sense to seek out the service of a lease financing expert who will be in a position to source the optimal funding as well as the best rate, term, and structure.


We advise all clients that, if they can, they should try and determine if the manufacturer provides financing - this is known as ‘captive ' financing and 99% of the time is your best deal - and fastest approval . That’s simply because the mfr. finance arm is incented to move product, as well as earn some income on the financing of course!


We talked in point # 2 about focusing on benefits - Leasing has numerous benefits. It would be rare that every benefit applies to every firm - so we recommend to clients that they outline what is most important to them with respect to the financing of this asset - those considerations might be a lease to own financing, or in some cases, an ' operating lease, which is akin to a short term rental, although a typical operating lease might range between 2-3 years in duration. The benefit of that type of financing is simply that your benefit from the use of the asset, not the ownership of it, and profiting through use of the asset is what it’s all about in business.


We tell clients that we aren’t necessarily overly proud of the way the industry sometimes confuses customers with a myriad of terminology and options, these includes references to FM, skip payments,

First and last, full payout, bargain purchase option, etc.


The most important piece of advice we can give a client is simply that by properly positioning their current financial position, demonstrating profit through use of the asset, and knowing whats important to them re payments, approval, lease term, etc should in fact allow them to maintain a control position in any lease financing negotiation.


Be an informed lessee in your search for a commercial equipment lease, understand that the market is competitive and people do want your business, and focus in on what financing equipment benefits work best for your firms sales and profit prospects.





7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Give Me Ten Reasons Why My Firm Should Consider Lease Financing!

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Equipment lease financing is an alternative choice for firms who wish to acquire capital equipment and other assets. Typically the other two methods to acquire such assets are either a cash purchase, or a loan of some sorts, usually via a bank.

The lease financing solution can frequently offer significant cost savings to the borrower, know as the 'lessee'. However, this is not just an expense strategy; there are numerous other reasons why this type of financing should be considered.

As an example, a lease transaction that requires only a low down payment might assist the company who has a lot of working capital tied up in receivables and inventory. Receivables and inventory typically represent the largest components of a company's working capital.

If a customer chooses to purchase the equipment instead they are in effect giving up certain key rights they have in a lease - for example, upgrading equipment, early cancellations, etc.

Normally when a customer considers either a lease or buy decision the business owner or financial manager would prefer to focus on ' hard dollar ' savings; while this is optimal of course many of the benefits of leasing in effect are intangible and should still be considered as part of the acquisition strategy. Let's look at some of those intangible benefits.

1. Credit Power - many lease firms have less restrictive credit qualifications than banks or other financial institutions. This is more so the case when the lessor is actually the manufacturer of the equipment!

2. Final Disposition - the company avoids having to dispose of the assets at the end of the term of the lease

3. Timing is everything - Lease approvals tend to be faster to obtain than a loan or bank type financing

4. Payment alternatives - many lessor allow skipped payments, seasonal payments and structured payments - example: A snow plough operator might request lower payments in summer when business is slow, etc

5. Bank lines untouched - in the current economic and banking environment businesses find it more difficult to access, or even maintain their bank lines - leasing leaves those lines untouched

.6 Budget issues - Leasing eliminates one the of largest obstacles to a customers ability to acquire equipment - the cost of the machine. Many firms have budget issues and the lease strategy allows them to in some ways circumvent that strategy and pay the lease through an operating budget, not a capex budget

7. When a customer is concerned about warranties or maintenance of the equipment he has significant leverage, via payments, to influence a high level of service from the manufacturer or lessor.

8. Use of asset - if a customer over uses an asset he does not necessarily have to reimburse the lessor

9. Down payment - Leasing requires only a small down payment

10. Balance Sheet optics - Properly structured leases can have the effect of enhancing the customer's balance sheet as the liability does not appear on the balance sheet - Customers want to use equipment to generate profits, they don't necessarily want to own it.

In summary, yes the business owner and manager would prefer a hard dollar evaluation of any asset acquisition, but we have shown that there are many intangibles to consider also, many of which could benefit the firm in a number of ways and have a significant impact on their business growth, financing, and profit.

Stan Prokop is founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com The company originates business financing for Canadian companies,specializing in working capital, cash flow, and asset based financing. In business 6 years the company has completed in excess of 45 Million $ of financing for companies of all size. For info on Canadian business financing and contact details see: http://www.7parkavenuefinancial.com/toronto_ontario_equipment_financing.html



7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/3630883

Cash Flow and Business Valuation

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When business owners and their financial advisors review a firm for acquisition purposes one of their main goals is the assessment of 'cash flow '. Business generates cash flows from three sources:

Their operations/profits

Investments into the business

Borrowing activities


When cash flows are being assessed the business owner, or their advisor is really going through 5 key areas of the business cash. Those areas are as follows:

1. Reviewing the income statement

2. Analyzing what cash needs to be spent on new equipment, plant, etc

3. Checking the overall working capital situation

4. Determining the total annual cash flows

5. Putting a value on those future cash flows

Where does the acquirer begin in this entire process? A careful review is made of the income statement with respect to gross profit margins and fine net income. After determining that final net income number the analyst ' adds back ' the amount of deprecation the company took, as it was not a real cash outlay.

This leaves us with somewhat of the 'magic number '- aka 'EBIT '. (Earnings before interest and taxes)

Careful analysis is made of the income statement - all the basics are reviewed: sales goals, material costs, profits, and the administrative expenses. Since the business owner is making an investment in the future when he buys a firm generally the above analysis is done for 3-5 years out.

We then carefully look at all equipment (point 2 above) and determine useful life and replacement needs.

Item 3 brings us to working capital analysis. As sales grow we need to carry more inventory and receivables, balance by what our suppliers will give us for credit, as well as what we can negotiate with the bank for operating facilities

The business owner, the acquirer also will review what is known as the 'terminal value' of the cash flow. This is a more complicated analysis involving projected cash flows divided by the cost of capital - growth.

We are in the home stretch - the final part of our analysis takes those future free cash flows and does a present value calculation to see what they are worth today.

In summary, whether Wall Street analysts are contemplating a multi billion dollar merger, or if a business owner is looking to buy Bob's Seed Supply the above valuation techniques are those that are always used by business acquirers and their advisors. The company, and its cash, is looked at from every angle in order to determine possible issues and changes required. A solid cash flow valuation will make or break the quality of the acquisition. The owner is 'counting' on that!




7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698