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Information on tax credit financing in Canada. The ability to finance SR&ED and film and digital tax credits is a cash flow acceleration tool
When you finance a tax credit such as SR ED you are in effect generating cash flow and working capital for your company and of course recovering monies that have already been spent! As most business owners pleasantly discover when they determine they are eligible for SR ED or film tax credits, these funds are non repayable, in effect they are grants .
The acronyms for these programs are SR & ED, FTC, and OIDMTC.
Customers that we work with typically generate financings through us after they have filed their claims. With respect to the SR &ED financings these claims are filed at the same time you file your corporate tax returns. Typically we can generate and successfully complete these financings within 14 days, sometimes it takes longer due to the complexity of the claim and other financial issues your company might be facing. It is critical there are no CRA tax arrears; otherwise your claim will be offset against the arrears. In cases where the tax arrears exist, and are smaller than your claim, we can arrange to pay Ottawa and provide you with the full financing benefits of whets left in your claim.
Canadian business owners and financial managers typically use these funds for short term working capital purposes.
In some instances, particularly in the film tax credit financing area your project can receive funds under the film tax credit financing prior to filing the final claim, provided your project can confirm eligibility. In these instances it is recommended that you can successfully prove you have filed and been approved successfully in previous years.
In cases where your corporate SR & ED claim is a first time claim there is a bit more due diligence put into the quality of the claim and your overall financial position, but categorically these claims can be filed and financing originated on a first time claim. Most companies use the services of well known SR &ED preparers, which accentuate the positive nature of your claim.
With respect to SR &ED claims that are financed, typical financing is generated at 70% loan to value. That of course simply means that you receive, on financing approval, approximately 70% of the total provincial and federal claim as working capital. These funds are repaid in entirety when you claim is adjudicated, approval, and funded by the government, so you are not paying ‘ monthly payments ‘ – you simply receive the working capital injection which is offset on final approval .
Canadian companies who are interested in tax credit financing and film credit financing should speak to an experienced advisor in this area who can assist them in the financing of the claim. It’s a great Canadian alternative financing strategy!
Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com
7 Park Avenue Financial
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
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
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