Sred Program Claims : Become Master Of Your Domain When It Comes To Tax Credit Financing

Financing Your R&D Claim In Canada – The Why – The How !

OVERVIEW – Information on financing SRED ( SR&ED) program claims in Canada. SR&ED tax credit financing makes more sense than you think!






Financing Sred Program claims in Canada is big business. Why should the business owner/ financial manager consider tax credit financing under Canada's SR&ED program? Let's dig in.

Several billion dollars of Canadian govt funds are given each year to the several thousand firms in Canada that participate in innovation and technology via their funded research.

Numerous misconceptions exist around the program - issues such as ' who is eligible ' ... 'are start ups eligible ' ... 'does a company have to be profitable to claim SRED ', etc. By the way, even if your firm is unincorporated you could still apply for SRED funding! ; Although the majority of claims submitted and that are financed tend to be for legal Canadian entities.

The reality is that even companies that are in the pre-revenue, or in the early stages of gaining sales traction can still apply, and no, you don't have to be profitable yet. And the amount to be claimed? It varies by province because it’s a combo of federal and provincial monies, but as a broad rule typical SR&ED claims amount to approx. 40% of your total spend in R & D innovation and process improvements.

The key to achieving SRED approval is of course a ' quality ' claim.

Many first time claimants we talk to sometimes struggle with preparation of their claim. Here's where the word ' expert' truly has meaning , as SR&ED claims are, more often than not, prepared by external consultants ( 'SR&ED Consultants/Engineers ' ) who have experience and expertise ( hopefully!?) in your industry.

In the last couple years a ' crackdown' of sorts has occurred around these consultants, with questions being raised about the fees they charge, which are often on a contingency basis ., and the aggressiveness of claims that are filed . Since we're addressing SRED tax credit financing you can assume that who prepares your claim and the quality of that claim is one of several important factors that play a role in financing.

Companies claiming SR&ED credits typically, and correctly so, view their filed claim as a ‘Receivable’. Naturally it's a government receivable, the one issue being of course that until your claim is audited and approved it's not 100% clear that it will is 100% approved! So many firms book that receivable, some book a more conservative amount, and then the ' waiting game' begins!

The financing of your SR & ED claim alleviates of course the ' waiting' for the financial and technical audits that come from the program. We'll never fully understand why, but banks are more than reluctant to finance these claims, and when they do so, as we have pointed out in the past, it’s in the context of their entire relationship with your firm, including external collateral they hold.

Enter SR and Ed financing. The finance process around your claim is very straight forward, a simple business application and accompanying data is all you need to get started. Innovation exists even in financing! , so claimants will be surprised to know that recent trends in SR&ED bridge loan financing allow firms to receive financing prior to their claim being filed, which was not always the case.

So yes, you can wait 3, 4, 6, even 12 months sometimes to receive your SR and ED claim funding chq, but if your firm requires or can use the additional working capital and cash flow now seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
with tax credit financing for SRED Program claims expertise.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian companies , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded in 2004 - Completed in excess of 90 Million $$ of financing for Canadian corporations .

Info re: Canadian business financing & contact details :

7 Park Avenue Financial = Canadian SR&ED Tax Credit Finance Expertise



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' Canadian Business Financing with the intelligent use of experience '

Stan Prokop