SR&ED Financing In Canada : SRED Loans Accelerate Cash Flow! Here Is Your ‘ How To’

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The Not So Tricky Art Of SR&ED Financing Loans In Canada

OVERVIEW – Information on SRED Loans in Canada . SR ED financing of SR&ED claims in Canada is a viable method to accelerate the cash flow from your firms r&d capital spend . Here’s why.. and how

SR ED financing (' SR&ED’) is a lot less of an art and science than most firms think. We're looking at SRED Loans from a ' how to' perspective - it's the ultimate cash flow acceleration with respect to the key benefit of the program - i.e. recouping a large part of your r&d capital spend. Let's dig in.

Billions of dollars each year flow from the government to thousands of firms who participate in the ' SR&ED ' program in Canada. The ability to turn claims into short term sred loans simply accelerates the benefits of the program. While the govt maintains that the program encourages companies to invest in the future via enhanced products and services the ' journey ' and the ' wait' for the refund can seem daunting at times.

Certain ' resources' are needed to both participate and benefit in the program. They include your own ability to finance the SR&ED process from start to finish, as well as the need to more often than not ( in fact almost always and recommended ) to acquire the services of a SRED consultant who understands your business and is experienced in the preparation , documentation, and filing of your claim.

There is a significant amount of time allowed for you to prepare your claim but the claim is always filed in conjunction with your year end. At this point both the eligibility and quality of your claim is key. Claims typically have a technical narrative and a clear break down of the costs you are claiming in the process. All of this effort is of course focused on one goal - the refund! , which is for most firms available in the form of a cheque from the government. Typical refunds are in the 30-40% of your total R&D spend, so it's easy to see why the program is in fact one of the most ' real' and ' attractive ' programs in Canada.

So at this point you've identified the nature of your claim, you've engaged an industry consultant to prepare the claim and you're filing your claim. In certain cases claims are subject to audit and assessment - thereby prolonging the waiting period for your refund.

Tired of waiting? Consider financing your claims as soon as it is filed. Enter the SR ED financing process. SR&ED Bridge loans are typically done on a 70% loan to value basis - allowing you to monetize your claim and accelerate that cash flow benefit we have been speaking of. The main collateral for the loan is of course the SR&ED claim itself - loans are repayable at anytime and rarely last longer than a year, by which time your refund will have been approved and processed via the govt.

Recent enhancements to financing claims allow you to file for both past and present claims, as well as to start a financing process around your next year’s claim.

The SRED loan process is quick and efficient, with most claims being financed within a couple weeks. If you're looking to accelerate R&D capital expenditures seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with SRED Loans that make sense for your firm.


Stan Prokop
7 Park Avenue Financial :

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 . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN SR&ED FINANCING AND LOAN EXPERTISE




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

' 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

How Can My Canadian Company Get a SR & ED Tax Credit Loan - Can SR ED's Be Financed?

Looking to be on the winners list for Canada's SR&ED Program ? Here's one way

Information on SR&ED financing in Canada . SR&ED loans are an important way for Canadian business owners
to access the cash they require to facilitate their r&d goals.

Not all Canadian business owners and financial managers are aware of one of the greatest government programs still currently in existence at both the federal and provincial level. The formal name for the program is Scientific Research and Experimental Development program. Most people call it simply the SRED (SR &ED) program; we have also heard many people pronounce it as 'SHRED 'also!




Not all Canadian business owners and financial managers are aware of one of the greatest government programs still currently in existence at both the federal and provincial level. The formal name for the program is Scientific Research and Experimental Development program. Most people call it simply the SRED (SR &ED) program; we have also heard many people pronounce it as 'SHRED 'also!

We put Canadian businesses into two categories when we discuss the program - those that don't know about the program period, and those that know about the program but are not aware that their claims can be financed.

SR ED financing is an excellent source of short term cash flow, and allows a company to reap the benefits, in cash of funds that they have put into R&D.

It is probably useful to do a short overview - let's call it a SR ED primer!

The program is administered at the federal and provincial levels of the Canadian government. It is very important to note that the SR ED grant (yes it's non-repayable) is for Canadian private firms only - it does not apply to public corporations the program is applicable literally to almost every type of firm and industry in Canada. A company files it's claim at the same time it files it's year end tax return.

In our experience the majority, we feel almost 95%+ of claims are prepared by an independent third party. They have expertise, credibility, and have a strong knowledge of the program and the government requirements. We would further point out that if a claim is not prepared by a qualified third party then there may be an issue in financing the claim - not always, but sometimes.

Claims can be expensive to process and prepare, and in general the industry has evolved into two types of costs associated with the claim. What are those two cost scenarios?

1. Customer pays a third party in full for time and preparation involved in the claim. The customer reaps the full benefits of the claim when it is processed

2. Customer signs an agreement on a contingency basis, and pays the preparer of the SR ED a portion of the claim when it is approved - bottom line he has no cash outlay and the SR ED consultant is at risk re time and preparation involved in the claim.

Let's now focus on financing of the claim. The financing of the claim is somewhat of a boutique industry in Canada, and requires specialized knowledge around the quality and collateralization of the claim. The Canadian banks, as a rule, with only minor exceptions, do not make SR ED loans.

Claims are financed at approximated 70% of loan to value. What do we mean by that? We mean that loans on SR ED are made to 70% of their combined federal and provincial amount. Example - Customer files a claim for $ 300.000.00. The SR ED loan would be for 70% of that amount: = $210,000.00.

Claims can be financed relatively quickly when working with a qualified financing expert in this area. It certainly is possible to complete a transaction in a couple of weeks, from initial discussions.

Naturally some level of due diligence is required on the firm, and we point out that many firms are in fact total start ups and are filing their claim for the first time. An additional financing note is that first time claims are scrutinized more closely as the customer at that point does not have a track record in this area. Track records help the financing.

In a future article we will discuss further relevant aspects of SR ED financing. Our key take away points here are that the SR ED program is a very viable program and sourced of cash for Canadian business. Claims can be financed, and are a valuable source of working capital for many Canadian firms. If your firm sees the benefits of SR&ED financing seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your financing needs.








7 Park Avenue Financial :
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 . Info /Contact :





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.





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


' Canadian Business Financing With The Intelligent Use Of Experience '





Stan Prokop

SR ED Financing : What You’re Missing In Sred Tax Credit Finance Loans

The True Tragedy Of SR&ED Claims Is Waiting ! Until Now

OVERVIEW – Information on sred tax credit finance loans in Canada . SR ED financing is the monetization of research credits for effective use of cash flow and working capital




SRED tax credit finance loans eliminate the pain of... waiting... for your refundable tax credit under Canada’s ' Scientific Research & Experimental Research' program. SR ED financing can quickly and efficiently complete the cycle in your firms R&D strategy. Let's dig in.

The Canadian SR&ED program is categorically one of the most solid initiatives in helping the private sector finance economic growth. Given that in the recent years the program has been scaled back a bit (less % credits = less refund cheque) the ability to maximize, and monetize the total benefit of the program is key.

Remember also that the program is a combination of co-operation from both federal and provincial governments, depending on which province your firm originates. SR ED financing by the way finances both parts of the claim at the same time - federal and provincial.

It goes without saying that the actual quality of your claim is key in both initial approval under the program as well as one consideration in financing approval. While the smallest per cent age of firms still prepare their own claims (and in many cases are successful) the vast majority of refund claims are prepared by qualified independent SR& ED consultants. They may be associated with the large C.A. / Accounting firms, or in a lot of cases are simply independent contractors.

While in the past these consultants were ' behind the scenes ' they are now clearly up front, including being identified on your claim, as well as having to state their remuneration on claims preparation. (The majority of SR ED consultants prepare claims at their expense and time, choosing to take a % of the successful claim as their ' fee'.

Since SRED Tax Credit Finance Loans are in effect short term bridge loans it makes total sense for business owners/managers to ensure their claim has taken advantage of govt offerings such as ' pre claim ' approval . Naturally any claim of good quality that doesnt even necessitate and audit is a good thing. Suffice to say the govt is on record as saying that claims they consider ' high risk ' will be audited and scrutinized with more vigor.

Let's get back to basics - i.e. the financing of your claim. It's possible to receive financing approval in a matter of days based on a simple application process that identifies your firm, its business, a copy of your claim, and details on who prepared it.

Business owners/managers seem always open to some good news - in the case of SR ED financing it's good to know that claims can be financing even prior to final filing... and if that wasn't enough next years claim financing can commence almost immediately. That’s cash flow acceleration 101!

SR&ED loans are structured as short term bridge loans - no payments are made by your company for the duration of the loan. Loan advances are typically 70% of the total amount of your combined federal and prov. claim.

If you're looking to eliminate a true business tragedy (waiting for a govt refund chq ! ) seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your r&d tax credit finance request.



Stan Prokop - 7 Park Avenue Financial :

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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN SR&ED FINANCE EXPERTISE



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Tax Loans For SRED Credits In Canada : Finding Your Way In SR ED Financing

What Seems To Be The Problem Here? SR&ED Tax Credit Financing Explained – Finally !



OVERVIEW – Information on R and D tax credits in Canada . SRED Credits can be financed. Here’s how SR ED financing via tax loans works and why tax credit financing should be considered if you are filing these claims







Tax loans in Canada for SRED Credits - Canada's R &D refundable credit system seems to pose challenges for some clients that are looking to monetize, via SR ED financing, their claims. Does there have to be a problem? We don't think so, let’s dig in.


SR&ED credits are available, of course, via the governments ' Scientific Research and Experimental Development Tax Credit ' program. Although federal budgets in recent years have changed the program significantly from a view point of streamlining the process, certain portions of the allowable refund were also cut back, i.e. capital expenditures relating to the actual R&D.

In Canada the majority of tax credit claims are prepared by independent consultants. These claims are filed of course in conjunction with your year end tax return. Retaining a good preparer for your claim is one part of the financing process of a claim. In the past couple years a lot of focus was placed on the way consultants bill and prepare claims - the majority of which are on a ' contingency' basis which in hindsight probably caused some bad behavior by a small few.

We encourage all clients to both consider whether they are eligible for the SR&ED credit, as well as focusing on filing the claim promptly as there are some deadlines in place under the program


Refundable credits return billions of dollars to Canadian corporations each year. Your ability to cash flow or monetize your claim makes the program complete in some way. Your company is in effect ' fast tracking ' the return of cash flow to your company by filing and financing your claim.

How then are the claims financed? It certainly doesn't have to be problematic if you have some expertise backing the process. A simple business application starts the whole process - typical info needed here are a copy of your claim, info on who prepared it, as well as your business financials.

We note here that many firms that complete claims range from start ups to firms that are still in early stages of revenue. So it's important to understand that the key collateral under a SR ED financing is fact just the claim itself. In effect you've created a (government) account receivable and are simply financing /monetizing that specific A/R.

The newest trend in tax loans for SRED is the ability of your business to in effect pre-finance your claim - you are reimbursed for funds you are spending during your spend . That fast tracks the return of R&D capital even faster.

If you're looking to avoid any ' problems ' associated with financing SRED CREDITS seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
The probable result - Problem gone!



Stan Prokop - 7 Park Avenue Financial :

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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN SR&ED TAX CREDIT LOAN EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


' Canadian Business Financing with the intelligent use of experience '





















Stan Prokop

Sred Tax Credit Loan Financing Needed? Here’s Precisely How SR ED Financing Works

A Financial Spoiler Alert ? SR&ED Financing Pays Off !

OVERVIEW – Information on how to obtain a SRED Tax Credit Loan . Sred Financing is a valuable cash flow tool to maximize research and development Credits for Canadian Companies .


The SRED Tax credit loan in Canada .Not all Canadian business owners and financial managers are aware of one of the greatest government programs still currently in existence at both the federal and provincial level. The formal name for the program is Scientific Research and Experimental Development program. Most people call it simply the SRED (SR &ED) program; we have also heard many people pronounce it as 'SHRED 'also!


We put Canadian businesses into two categories when we discuss the program - those that don't know about the program period, and those that know about the program but are not aware that their claims can be financed.
SR ED financing is an excellent source of short term cash flow, and allows a company to reap the benefits, in cash of funds that they have put into R&D.


It is probably useful to do a short overview - let's call it a SR ED primer!


The program is administered at the federal and provincial levels of the Canadian government. It is very important to note that the SR ED grant (yes it's non-repayable) is for Canadian private firms only - it does not apply to public corporations the program is applicable literally to almost every type of firm and industry in Canada. A company files it's claim at the same time it files it's year end tax return.


In our experience the majority, we feel almost 95%+ of claims are prepared by an independent third party. They have expertise, credibility, and have a strong knowledge of the program and the government requirements. We would further point out that if a claim is not prepared by a qualified third party then there may be an issue in financing the claim - not always, but sometimes.


Claims can be expensive to process and prepare, and in general the industry has evolved into two types of costs associated with the claim. What are those two cost scenarios?


1. Customer pays a third party in full for time and preparation involved in the claim. The customer reaps the full benefits of the claim when it is processed

2. Customer signs an agreement on a contingency basis, and pays the preparer of the SR ED a portion of the claim when it is approved - bottom line he has no cash outlay and the SR ED consultant is at risk re time and preparation involved in the claim.
Let's now focus on financing of the claim. The financing of the claim is somewhat of a boutique industry in Canada, and requires specialized knowledge around the quality and collateralization of the claim. The Canadian banks, as a rule, with only minor exceptions, do not make SR ED loans.



Claims are financed at approximated 70% of loan to value. What do we mean by that? We mean that loans on SR ED are made to 70% of their combined federal and provincial amount. Example - Customer files a claim for $ 300.000.00. The SR ED loan would be for 70% of that amount: = $210,000.00.


Claims can be financed relatively quickly when working with a qualified financing expert in this area. It certainly is possible to complete a transaction in a couple of weeks, from initial discussions.


Naturally some level of due diligence is required on the firm, and we point out that many firms are in fact total start ups and are filing their claim for the first time. An additional financing note is that first time claims are scrutinized more closely as the customer at that point does not have a track record in this area. Track records help the financing.


There our some other relevant aspects of SR ED financing but our key take away points here are that the SR ED program is a very viable program and source of cash for Canadian business. Claims can be financed, and are a valuable source of working capital. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with SR&ED financing needs.





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 10 years - has completed in excess of 80 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 re: Canadian business financing & contact details :

7 PARKAVENUE FINANCIAL = CANADIAN SRED (SR&ED ) TAX CREDIT FINANCING EXPERTISE







CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com












Stan Prokop