The SR ED Tax Credit Loan : Turning Refundable SR&ED Credits Into Cash Via a SR ED Financing Consultant

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Is Utilizing SR&ED Credits without financing them absurd ? You decide

OVERVIEW – Information on the SRED tax credit loan in Canada. A SR ED financing consultant can accelerate the cash flow investment your firm has in refundable tax credits

A SR&ED tax credit loan seems like common sense logic for your firm's R&D claim. A SR ED financing consultant is best prepared to assist you in cash flowing you claim. Here is why... and how, so let's dig in.

If business people believe that time is truly money then the investment your firm makes in Canada's Scientific Research and Experimental Development is true wealth! The process, especially for first time claimants can be a bit of a journey!

The role of your SR&ED financing advisor is NOT the same as that of the consultant that prepares your claim. Probably 99% of the refundable tax credit claims that are in fact filed in Canada are prepared by industry consultants who have both the expertise and reputation in preparing a claim that is both technically correct, as well as .. you guessed it... approved!

Since SRED claims are done in almost any industry it makes sense for you to pick the right firm or person that has the expertise to maximize your claim. The best people in this industry maintain solid relationships and communications with the good folks at Revenue Canada!


Over the years many changes, mostly positive have altered ' SHRED ‘. They include changes in per cent ages claimed/allowed, as well as the filing process itself, which has been greatly streamlined. It's interesting to note that the majority of these consultants tend to get paid on a contingency basis - that helps alleviate the risk and time involved in preparing claims, putting the risk and pressure on the consultant, not your firm.

If you do in fact buy into our ' time is money' concept then the actual time it takes to file a claim and have it either reviewed or audited by Revenue Canada just adds to the logic that you should consider financing your claim .

It is certainly not unusual to wait for the better part of a year for your refund. Therefore financing that claim either as you prepare it, or as soon as you file makes solid ' cash flow' sense. If your firm has come this far in investing time and money in your research tax credit refund cash flowing it now and using the funds for any general company purpose certainly is a strong argument.

Any claim of almost any amount can be financed should you choose to cash flow your claim. Financing SR&ED claims can be done for any company, both start up, and ' mature'. First time filers welcome!

If your firm makes the decision to finance your claim 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 SRED TAX CREDIT LOAN 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 - 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 :


7 PARK AVENUE FINANCIAL = CANADIAN SR&ED TAX CREDIT FINANCING 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

Fax = 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

Financing SR ED Credits In Canada : The SRED Tax Credit Loan : The Case Against Waiting

Connecting The Dots Via A SR&ED R&D Refundable Tax Credit Finance Strategy

OVERVIEW : Financing SR&ED ‘ sr ed ‘ credits is the last piece of the r&d recapture process . A SRED Tax credit loan completes your cash flow strategy under Canada’s Scientific Research & Experimental Development refund program

Financing SR ED tax credits is the final ' connecting dot ‘in your firms’ journey in Canada’s SR&ED r&d refund program. We're examining the SRED Tax Credit Loan; it makes a strong case against waiting for your refund. Let's dig in.

One of the characteristics of the SRED program is that despite providing billions in funding for thousands of firms in Canada the amounts range from claims from 50k up to 1 Million $ +. For firms like yours that invest in R&D that investment can be a significant portion of your costs.

While R&D is to a certain point discretionary the reality is that todays competitive environment forces you maintain the maximum investment you can. SR&ED financing certainly assists you to plough back your maximum given that waiting for your refund is eliminated - cash flow is accelerated under the loan.

While the real objective of the program is to reimburse you for your R&D capital costs it seems logical that many firms wouldn’t take advantage of the program if they couldn’t recapture a large part of their cash flow investment. The main resource that many firms rely on are the ' SR&ED Consultants “that assist firms in preparing their claims and working with your accountants to properly file the claim.

That claim eligibility is a key part of the SRED tax credit loan process as a quality claim prepared by an experienced consultant helps speed up the financing process. That ' process' by the way is typically the most common question we get from clients on financing SR ED credits - i.e. how long does it take to get a SR&ED bridge loan and what’s involved.

The good news? Claims can be financed in a matter of weeks, in certain cases even less time. And the actual application? Just as easy - typical requirements are a copy of your SR&ED filing, your financial statement and tax return and some miscellaneous info typical for any business loan - i.e. your articles of incorporation info, etc.

‘Timing is everything ‘is an oft used cliché in business. The good news around financing SR&ED credits is that last years claim is financeable, as is this years, and yes, next years also can be started along! Your ability to document claims properly just moves everything along. SR&ED bridge loans are financed at 70% of the value of your claim - in simple arithmetic: every 1000.00$ of claim nets you 700.00$ in immediate financing.

Very few business people dispute the value of R&D and the tremendous benefits attached to the SR&ED program - it's equally a good thing to fund your claims and accelerate cash flow. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can help you ' connect the dots ' in your refundable tax credit cash strategy.


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 TAX CREDIT FINANCING 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

SR ED CRA Financing : 6 Mistakes To Avoid On A SRED Tax Credit Loan

Here’s The green light

On Financing Your R&D Credit : Financing SR&ED Tax Credits


OVERVIEW – Information on the finance of a SRED TAX CREDIT loan in Canada . SR ED CRA financing involves careful planning and knowledge and timing to achieve maximum benefits




SR&ED CRA is very much in the news today. Much of that news has to do with the ability to both maximize your claim, and finance, via a SRED Tax Credit Loan , your research spending. We'll focus on some of the current ‘ lay of the land' issues, as well as , equally as important, some of the mistakes you shouldn’t make when financing a SRED claim. Let's dig in.

Just when we thought things have ' settled down' in the world of the tax credit things seem to be heating up again. Why? Part of that is due to the recent federal budget. After making some very significant changes in the program over the last year or two things seemed to settle down quite nicely. Yes some of those changes affected claim size and availability ( elimination of capital assets used in R&D) but some great things happened also - a mini purge of unscrupulous SR&ED consultants, as well as a simplified ( we think!) application program.

The program, simply speaking, allows for government refundable credits on research and development and allows Canadian business owners to recover a huge portion of direct spend on R&D.

Our focus is on financing your R&D credit, so there’s probably no better time to go over some key mistakes

you can make in financing, as well as simply preparing your claim.



Mistake #1 is simply ensuring you're not aligned with the wrong consultant, that mini industry out there that prepares your claims if you or your accountant isn’t doing it yourself. Ensure that you're aligned with a reputable consultant that charges a fair fee or contingency rate. (A huge amount of claims are prepared on ' contingency' at the risk of the consultant)

Not making Mistake# 2 revolves around the timing of your SRED and the ability to time the financing. Claims historically could only be financed after they are filed together with your corporate tax return. That is no longer the case and you can generate financing around your claim even more it's filed if you have a credible claim and can show some experience in this whole area.

Mistake # 3 is ensuring that you understand that if you have CRA arrears of any type you're not going to be able to receive your chq from the government. They will simply net it out or apply it against your arrears. So focusing on the financing of a claim with CRA arrears is not a solid strategy suffice to say.

Mistake #4 involves assuming that your bank might finance your R&D claim. The short answer here is they in general don't do that, and if they will it’s in the context of a larger relationship with yourself with firms that are quite established and have other collateral. Your best bet to ensure proper financing of your claim is to seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can ensure the proper tax credit financing is in place in a prompt, efficient and cost effective manner.

Mistake # 5. Simple. Don't confuse the IRAP program with SRED. IRAP claims arent financeable, they're a form of pre approved grant that involves up front approval and funding. The best way to think of it is IRAP is direct funding, SR&ED is indirect. In effect the government with an IRAP funding is pre approving your project. That's not SRED.

Mistake# 6- Don’t lose focus on a quality claim to therefore allow a minimum of audits, appeals, objections, etc. Historically over 3 Billion ++ dollars more in Sred funding has been available on an annual basis over IRAP.

We’re the last to predict where the future of R&D funding in Canada will be going. But understand that as long as you have a claim it’s financeable under very creative structures.




7 Park Avenue Financial = 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