SR&ED Tax Credit Loan Financing Working Capital Via SRED Finance

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YOUR COMPANY IS LOOKING FOR A CANADIAN SR&ED FINANCING 

LET US HELP YOU FINANCE SR&ED CLAIMS TODAY! FUNDING YOUR R&D SCIENTIFIC RESEARCH

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.com

 

 

FINANCE YOUR CANADIAN GOVERNMENT SR&ED CREDIT REFUND  

 

  

What is the SR&ED Credit and Why Should Your Company Take Advantage of the Program?   

 

SR&ED financing is simply the method by which you can, at your own firm's own option, monetize or ‘cash flow' your SR&ED tax credit and generate needed working capital and cash flow for ongoing operations or of course further investment in your R&D capital processes and development. All Canadian controlled private corporations  in every industry are eligible under the program.

 

 

WHAT IS SR&ED? 

 

The 'SRED' program is one of the best, yet somewhat underutilized ways of recovering research and development expenditures. When both the federal and provincial tax credits under the program are combined they can return up to 50% of your R&D spend via the Canada Revenue Agency administration of the sr&ed program.

 

ELIMINATE THE WAITING - CASH FLOW YOUR SR&ED REFUNDABLE TAX CREDIT

 

We have all seen the oil change commercial where the mechanic states ‘you can pay me now or pay me later'. Well, financing your SR ED Claim has a similar ring to it – of course, you have the option of waiting for the government at the federal and provincial levels to mail your firm your cheque – which could take anywhere from 1-12 months – Or you can arrange to finance that claim now and utilize those funds for any business purpose.

 

  

FINANCE YOUR SR&ED CLAIM BEFORE YOU  FILE - YES YOU CAN!  

 

Are we eligible to finance our SR ED tax credits? Clients often ask. We can only reply that if you have a claim, and have filed it, you are in fact eligible.  In fact, under certain circumstances, it can be arranged to receive funds even prior to filing for the investment tax credit.

 

 

ELIGIBLE SR&ED EXPENDITURES 

 

That's what we at 7 Park Avenue call a financial incentive!  Spending items covered in your refund includes items such as salaries, work done by subcontractors on your project via guidelines around scientific of technological uncertainty,  and items  and materials purchased relevant to your specific project. Your claim is filed with your T1 tax return in conjunction with your accountant and SR&ED Consultant.

 

 

THE BENEFITS OF THE SR&ED PROGRAM 

 

Clearly, the purely financial benefits of the SRED grant program in Canada are numerous – you receive significant amounts back from expenditures made on research, including wages and salaries associated with that research, as well as major portions of material and equipment expenses.

   

THE ROLE OF INDUSTRY SR&ED CONSULTANTS   

 

Industry sred consultants with technical knowledge in your business and industry are invaluable in maximizing your claim and preparing the claim via write-up and filing. Bottom line - maximizing sr ed funding for a more effective cash management process around your r&d. The software development industry is a huge user of the sr&ed program to capitalize on the tax incentive provided by  the program.

 

All of those above-noted expenses are ‘cash out' to your firm – the funds have been spent. So why not consider financing your claim and receiving those funds back in an extremely timely manner?

 

SR&ED FINANCING - WHAT YOU NEED TO KNOW!

 

We can almost hear some of your questions now as you review our information, as they are typical of what many clients ask:

 

• How exactly do I monetize the SRED claim?
• What exactly is an SRED loan – is there additional debt involved?
• How long does it take and what does it cost?

 

Let’s cover some of those very basic questions so you can feel comfortable about the SRED financing process. The SRED financing or the monetization or cash flowing of your SRED claim is simply a business financing that uses the actual SRED claim as collateral.

 

You receive approximately 75% of the full federal and provincial total as a short-term cash loan that is collateralized by the SRED itself. Of course, the additional 25% is still yours, it is simply held back as a buffer for any adjustments that are made to your claim.

 

 SR&ED LOANS DO NOT HAVE MONTHLY PAYMENT OBLIGATIONS 

 

No payments are made on your SRED loan, and the final cheque to your firm (you have already received 70%) is the holdback amount less the financing costs. So you have pure cash flow and additional working capital, no long-term debt associated with a loan per se, and no payments are made. That is truly creative business financing of which most Canadian business owners are not even aware.

 

 FUNDING IN 2 WEEKS! 

 

The typical process to create SR&ED financing is approximately 2-3 weeks, you should quite frankly view it as any other business application – the usual business info and backup on your firm, plus of course the details of the SRED financing.

 

From the government's perspective, the amount of time it takes to validate your claim on the sr ed refund or inquire about any specific details might be from 2-6 months depending on the size of your claim. Your actual SRED credit is the main collateral for the loan; Canadian firms are tired of waiting for their refund, so they explore the refundable tax credit financing option for sr ed tax incentives.

 

This short-term working capital loan is a key source of cash for many younger and growing companies, with many still in 'start-up' mode. They can't wait for long periods of time to conduct research and recover expenditures related to future sales prospects - SRED finance loans for Canadian companies allow the firm to grow faster as you focus on r&d around scientific or technological advancement / technical challenges in your company/industry.

 

 CONCLUSION  - SR&ED TAX CREDIT FINANCING / SR&ED LOANS

 

In summary, have your claim prepared by a qualified SRED consultant - recent submission rules and styles have changed.

 

If you have unlimited cash flow and working capital resources by all means wait for your cheque – if you want to cash flow or discount your claim speak to 7 Park Avenue Financial,  a credible experienced and trusted business financing advisor in the area of SRED Financing.

 

  

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION  

 

What is the sr&ed expenditure limit?

Canada's sr&ed program offers specified rates on qualified expenditures - with a non-refundable tax credit that is applied to a reduction in taxes payable.

 

 

Click here for the business finance track record of 7 Park Avenue Financial

Revolutionary Tax Credit Financing Options You Need To Know About / Unlocking The Potential Of SR ED Loan Financing

 

YOU ARE  LOOKING FOR CANADIAN  SR&ED TAX CREDIT FINANCING! 

SR&ED TAX CREDIT FINANCING - YOUR ULTIMATE GUIDE

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.com

 

 

 

THE SECRET  TO MAXIMIZING SR&ED TAX CREDITS?   FINANCING !!

 

"Development is taking the research and turning it into something useful." - H. Dean Kamen

 

  

WHAT IS SR&ED TAX CREDIT FINANCING  

 

SR&ED (SRED) tax credit financing is a solid strategy used by more and more Canadian business owners and financial managers who wish to accelerate the benefits of Canada’s SR ED program.  Let's dig in on sr&ed tax credit financing options -

 

 Cash flowing, monetizing, or factoring via sred tax credit funding (they all mean the same thing!) your Canadian SR ED claim can accelerate cash flow and working capital for your privately controlled Canadian business that is utilizing SR ED credits under the government's program.

 

"Without financial resources, innovation remains a hobby." - John Doerr

 

In many ways the financing of your SR ED credit actually allows you to maintain your competitive edge, as the combination of your non-repayable tax credit and the immediate financing of it are a ‘double whammy‘ in the face of your competitors who might not use this strategy.

 

 

 

  

  

TURN YOUR SR&ED TAX CREDIT INTO A SOLID SOURCE OF FUNDING FOR YOUR BUSINESS  

  

  

 

A banker we deal with recently told us that current industry statistics show that many companies who are in fact eligible for the SR ED credit aren’t even applying for it, let alone financing it. Therefore when your firm maximizes the total value of your claim and then generates instant cash flow on that claim you are clearly leading the pack in this regard. That's the benefit of sred tax incentive loans.

 

  

HOW CAN I USE SR&ED TAX CREDIT ADVANCES  TO GROW MY BUSINESS  

 

Many clients tell us that they utilize the SR ED funds that they finance to assist in acquiring new equipment that allows them to maintain a competitive edge in their markets. The reality is of course that funds via  SR&ED financing solutions can be used for any general corporate purpose, which might be things such as equipment acquisition, advertising and marketing, reduction in payables or debt, or of course continued investing of even additional research and development efforts.

 

  

HOW DOES SR&ED TAX CREDIT FINANCING WORK?  WHAT DOCUMENTATION IS REQUIRED FOR  THE SR&ED TAX CLAIM  

 

So what is the cash flow and working capital potential in your SR ED, and how do you unlock that potential under the tax credit financing process?

 

If you are already filing for SR ED credits you are no doubt working with the assistance of your client, or, alternatively, someone that is known as a SRED consultant. Having a solid resource in one or both of these parties allows you to maximize on your potential claim. 

 

What is the role of SR&ED Consultants ?  Firms hiring a sr&ed consultant to rely on these experts to hand paperwork and documentation around their project to both identify the project clearly to CRA, as well as document the maximum allowable amount under SR ED - Quality claims will also avoid sr&ed audits by CRA.

Companies complete CRA form T6661 which is the actual narrative around the project and the challenges faced by the business in the sr&ed project.

Once you have filed your claim we recommend that you consider immediately financing the claim. Naturally, you don’t have to do this, and can simply wait the 3-12 months that it might take Ottawa and your particular province to review the claim, adjudicate it, and process it for payment. But, as we state, why not consider financing the claim?

 

  

HOW DOES A  SRED TAX CREDIT LOAN WORK?  WHAT ARE MY SR&ED TAX CREDIT FINANCING OPTIONS?  

 

Clients ask us how the actual process works. It is quite simple really. Your claim is generally financed at 70% of the total value of the amount you and your accountant and consultant have claimed. You can receive cash immediately after it is filed.

 

In certain cases you can actually receive funds for the claim prior to financing – that whole process is called SRED accrual financing. Some of the basic criteria are simply that you must have filed a claim before, have a solid reputable party preparing it, and be prepared to demonstrate good records and accounting around those expenses you are intending to claim.

 

 WHAT ARE THE BENEFITS OF SR&ED TAX CREDIT FINANCING 

 

So how can we summarize in a ‘bottom line' manner? It's simply as follows – you should be filing SR ED claims if you are eligible. On filing you have the option of financing that claim, so you are bringing immediate cash flow and working capital to your firm on funds that are not repayable to the government.

 

Funds can be used for any company purpose, and proper utilization allows you to maintain a competitive advantage over your competitors. That’s using research as a cash flow generator – a solid financing strategy!

 

Financing sr&ed tax credits for startups is always possible, even if you are a first-time filer or pre-revenue/early stage.

 

 WHAT ARE THE INTEREST RATES AND REPAYMENT TERMS FOR  THE SR&ED TAX CREDIT LOAN 

 

Financing rates for Sred Loans are very competitive for this form of non-dilutive financing. No repayment is made during the term of the loan, and loan facilities are closed out when Canada Revenue Agency pays the refund - Loan advances can be made after the business files its claim, or, if the company chooses financing can be approved prior to filing, ensuring a continuous road to cash flow on the claim.

 

Financing your refundable tax credits allows a business performing r&d to generate cash flows which can help the company run on a day-to-day basis as well as grow - all while not having to access additional owner equity and dilute ownership at a critical growth stage in the company.

Businesses can finance claims when they are completed and filed, or a company can choose to fund as they accrue their work in their project .  Most financings are approved within a 2-week period from start to finish via a basic application and information on the company.

 

 

 

CONCLUSION - HELP AND EXPERTISE FOR YOUR REFUNDABLE  TAX CREDIT LOAN

 

Get the cash you need to grow your business with SR&ED tax credit loan solutions. Find out how a SRED loan can help your business thrive in the new economy! Talk to the 7 Park Avenue Financial ( tax credit financing experts )  team about SRED tax credit financing services to grow your cash flow needs via maximizing the benefits of sred funding/tax credit financing as well as other financing options for business to assist in cash flow and cash management in your business.

 

 

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

 

WHAT IS SR&ED

Canada's  Scientific Research and Experimental Development (SR&ED) Program provides investment tax credits via a refundable tax credit to Canadian businesses that focus on r&d.  Companies of all sizes from start-ups to large corporations, and even public companies access the program - Most firms focusing on SR&ED receive a tax refund, and thousands of Canadian businesses access over 3 Billion dollars annually.

 

 WHO IS ELIGIBLE FOR SR&ED TAX CREDIT FINANCING 

 

SR&ED Tax credit financing for SMEs is available for any Canadian-controlled private corporation to claims research and development under Canada's  Scientific Research and Experimental Development (SR&ED) investment tax credit - R&D performed by the business must be done with a focus on the advancement of scientific knowledge and for the purpose of achieving technological advancement in science and industry. Companies that are not private receive a non refundable tax credit to reduce income tax payable in the tax year- i.e. public companies who conduct research around scientific or technological uncertainty.

 

WHAT ARE SR&ED ELIGIBILITY CRITERIA

 

Businesses qualifying for a SR ED refund/tax incentives must be able to prove criteria around technological advancement, and technological uncertainty and be able to provide information around technical content and the processes the business undertook in the research and development.

Project documentation must demonstrate the employees involved in the research and the amount of time spent on the project. The largest portion of any sr&ed claim typically involves wages and payments to subcontractors.

 

Financing via cash advances for the sr&ed claim can be funded via third-party commercial finance companies who fund the tax credit claim either prior to the refund being claimed or after the business has filed its year-end financial statements and documented their evidence-based documentation for innovation the business has focused on in their research and development.

 

 WHAT AMOUNT OF EXPENDITURE CAN BE CLAIMED? 

The amount of eligible expenditures that can be claimed in SR&ED falls under the categories of eligible salaries and wages, payments to subcontractors on the sr&ed project and materials cost pertaining to the sr&ed work under the category expenditure limit. Canadian controlled private corporations, aka "  CCPC's) " claim for specific percentages of these expenditures under the sr&ed expenditures for credit calculation.

Supporting documentation around the qualified expenditures must be kept by the business around actual work completed, people involved in the work and the calculations done by the firm under CANADA REVENUE AGENCY /CRA guidelines.

 

Stan Prokop

How Canada Sred Claims Deliver Cash Via Your SRED Financing Strategy !

We probably couldn’t count the worries or challenges you have around your competition in Canadian business. But one way in which Canadian business stays ahead of the challenge is via the Canada SRED grant program. Sred claims deliver billions, (that’s not a typo - it really is billions) of dollars of non repayable grant funds to firms such as yours. So could Sred financing assist your firm to stay even more competitive?

We tell clients that we think it can, if only because it accelerates the cash flow and working capital that your firm has coming from its R&D claim

Your ability to ' unlock ' sred funds is simply a cash flow accelerator. Clients often ask what the required uses for those funds are if in fact you do choose to finance your sred claim. The reality is that the funds can be used for any general corporate purpose - so that includes of course general working capital and cash flow, the purchase or down payment of additional new equipment and technology, or, at its most basic, retirement of short term or long term debt on your balance sheet .

Your ability to quantify and demonstrate your business processes and advancements can result in hundreds of thousands of dollars of non repayable sred funds under the combined federal and provincial program.

There isn’t a business owner in Canada today, certainly that we have met, that doesn’t have some issues and problems with the role of government in business. Want a method of striking back?! Take advantage of sred and sred financing. Sred claims under Canada sred legislation are your encouragement to recover 30-40%, even more in your funds spent in the previous fiscal year.

We advise clients that the process around the financed of a sr&Ed claim is much defined. In fact in the 2010 environment, based on some new rules for claimants, its even more defined. Claims are most successfully financed when they are generated by a proper party - in the industry this party is known as a sred consultant, and their ability to craft and present a claim under new guidelines from the government is key to the ability to maximize your claim. Maximizing you claim maximizes financing, simply because under sred financing a typical advance is 70% of your claim, so the size of your overall total claim determines the financed amount, as in our example of the typical 70%.

It's common knowledge in the sr&Ed industry that a huge majority of companies eligible to claim a sred grant don’t do it. We have heard all the excuses, and we won’t weigh in on them now, but they typically include - - ' we haven’t heard of the program .... Is there an audit involved ... isn’t expensive to prepare a claim, we don’t have enough time, ‘‘‘... etc, etc!

We would rather preach to the converted. So if you are filing sred Canada claims and want to accelerate cash flow immediately then consider monetizing your claim. It’s a very basic process, via an application, providing back up on you sred, and being agreeable to collateralizing the claim via a basic documented process.

Speak to a trusted, credible and experienced sred tax financing expert to ensure you can easily and effectively enjoy the benefits of sred financing via a cash flow and working capital financing of the claim.
--
Stan Prokop - founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/sred_financing_sred_claims_canada_sred.html