Sr&Ed Financing – SRED Loans in Canada

Canadian business owners and financial managers certainly appreciate and utilize one of the best (maybe ‘the’ best?) government grants in Canada – the Canadian SR&ED program administered by Ottawa and the provinces.

But did you know that you can ‘supercharge’ your SR ED grant by monetizing that claim into cash flow now?! The reality is that if you have filed a SR ED claim now you can immediately convert that claim into cash flow and working capital now for your business.

You are probably focusing on SR ED as a program because it allows you to remain competitive within your industry; as the world goes ‘ global ‘ your Canadian firms ability to stay competitive in your local or international market is key .

Clients ask us questions in two main areas “

- Why should we financing our SR ED claim
- How do we finance that claim?

Receive cash now for your filed SR ED claim can in effect inject immediate working capital into you claim. And remember that financing your claim is not the process of taking on more debt; you are simply cash flowing or monetizing that SR ED receivable now, in an effort to use that capital to continue and grow your business. Many firms we work with consider their SR ED claim as the largest receivable they will have that year.

Also, let’s talk about timing. If you have filed a first time SR ED claims it certainly would not be out of line to say that you might have to wait close to a year for your funds. Remember of course those funds are non – repayable. So if you have cash coming a year from now why, and its non repayable, why wouldn’t you consider financing your claim and putting that cash to work now. Clients as what they can use those funds for – the answer is simply, any, we repeat ‘any’ general corporate purpose. So that could be:

- Reduce payables
- Purchase new equipment
- Invest in marketing
- Start your new Sr ed process for the next fiscal year

The reality is that its company’s funds use them as you would another other injection of working capital.

So what is the process of financing a SR ED claim? To say that sred financing is a boutique and niche industry would be an understatement. Would you consider entering into a new business without the benefit of working with an expert? We don’t think so, so seek out a trusted, credible and experienced advisor in your area to maximize your Sr Ed loan.

The process, with an expert in tow, is simple. It involves a basic business application, the usual due diligence around any type of financing (info on your company, owners, etc) and the documentations that collateralized the SR ED into an asset to be financed.

How much can we get? Are the final questions from clients? The answer is that 99% of the time your sred is financed at 70% - that means that you receive 70 cents on the dollar now for your claim, with the balance coming when you claim is approved by Ottawa.
Sr Ed is a national program and your sred claims can be financed in any province in Canada.

In summary, business owners should avail themselves of the SR ED program. They should also consider financing their claim which allows them to inject working capital immediately into their firm. Speak to an experienced credible advisor in the area and maximize the benefits of this great Canadian grant program!

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Stan Prokop is founder of 7 Park Avenue Financial. Originating financing for Canadian companies, specializing in working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size . For info and free consultation on Canadian business financing and contact details :
http://www.7parkavenuefinancial.com/Sr_Ed_Financing_SRED_Loans_Canada.html