Financing Refundable Tax Credits In Canada : SRED And Film Bridge Loan Similarities

Your New Target Goal

For SR&ED And Film Tax Credits : Financing!

OVERVIEW – Information on non refundable tax credits in Canada . Why a bridge loan for your SRED or Film , television or Media project makes financial sense





Non refundable tax credits in Canada. We're told that it's good to have a ' goal ' in business, and in the case of a tax credit loan for either your ' SR&ED' or 'film/TV or animation' credit might well be to finance that claim! Let's dig in.

Although we're talking about two separate government tax credits for separate aspects of Canadian business ( 1. Research 2. Media/Entertainment) both of these claims provide your company with the recovery of valuable cash flow/capital spent.

And our premise? It's simply that if you choose to finance either of these claims you're only doing one thing: Accelerating the benefits by recouping working capital faster. Now that's a goal to aspire to, right?

Although, as stated, we're talking about two different government programs there are some very strong similarities between the two. One of those is that they are both structured around federal and provincial co-operation.

Another example of similarity is that many producers / owners of media projects can also use the SRED program to claim non refundable credits. When it comes to the SR&ED (acronym for ' Scientific Research + Experimental Development ‘) credit any media project in any of the genres of film, TV and animation can file a claim around innovation they might have developed and spent capital on in areas of assets for film and TV (i.e. cameras, etc) or software in the evolving area of 3D as an example.

When it comes to Media tax credits many owners or co-owners of productions are in fact partially non Canadian in nature. A large majority of these productions are eligible for SR&ED and Film credits because they have an aspect of Canadian ownership, and are often domiciled under a legal Canadian special purpose entity , therefore becoming eligible for the ' SPEND' they make in Canada relative to the specific qualification of either of our two tax credits in question .

It therefore can't be a surprise that our proud Canadian nickname of ' HOLLYWOOD NORTH' continues to gain traction based on several underpinning fundamentals - a strong economy, robust tax credits a diverse geography and talent pool.

In Canada the federal and provincial governments allocate Billions of dollars every year to both programs, funding thousands of projects in either SR&ED research/innovation or film, television and the fast emerging Transmedia industry. In the case of the SRED program only privately owned (i.e. not public companies) are eligible to claim. The big guys seem to have their share of other benefits, right?

Speaking in broad terms both programs can generally deliver a non refundable tax credit claim for your project in the 30-50% range. Again those are common claim amounts, but vary from a technical term based on which tax credit it is, what province it originates in.

Both claims are typically prepared by an expert in either claim:

SR&ED = Sred Consultant
FILM/TV/ANIMATION= tax credit accountant

Have we forgotten anything? We almost did. It's why business owners, financial managers, and production owners should consider financing your claim. It's simply all about accelerating cash flow.

Once again similarities arise. Credits are financed via bridge loans - no payments are made for the duration of the loan, and financing costs are deducted from the final claim cheque that comes from the government. Broadly speaking claims of non refundable tax credits are financed at 70% of their value, providing valuable cash flow and working capital for companies (SR&ED) or Producer/owners (FILM.

Check out the benefits and ' next steps' in financing your tax credit by seeking and speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you with your 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 - 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 :

http://www.7parkavenuefinancial.com/non-refundable-tax-credits-loan-sred-film.html







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

Phone = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Financing Two Of Canada’s Tax Credit Programs: We’ve Got It Right In Film and SRED

Hard To Believe ? Tax Credits Can Be Financed!

OVERVIEW – Information on financing tax credit programs in Canada. Here’s Why You Need To Consider SRED and Film Financing for cash flow and working capital !

Financing tax credit programs in Canada. Whether its SR&ED R&D credits or the much more sexy ' film, TV, transmedia' credits it’s always a surprise to us that the actual users of these two Canadian programs don't always know, or consider that claims under these two programs can be financed. Let's dig in.

Any country, Canada included typically has some sort of generous and often well used non repayable credit (which can be monetized/financed) All sorts of Canadian government programs, grants etc are available - two of the most popular ( and financed by the way ) are ' SR&ED" and ' FILM'.

Numerous aspects need to be considered to successfully complete a claim, and finance it under each program. Let's discuss a couple of aspects and also identify some key similarities in the way in which these programs can be financed for cash flow and working capital.


SRED:

Canada’s Scientific Research and Experimental Development Program (S R E D) provides Billions of dollars of funding for research in Canadian industry. Despite a handful of what we can call key changes to the program claiming ' SRED’, (including a recent nationwide focus to validate the value of the program) thousands of Canadian businesses, including your competitors, file claims. When it comes to R&D claims its all about the technical aspects of your claim.

That's where the role of the preparer, known as the ' SR&ED Consultant' plays a key role. They prepare claims for you in one of two manners - they will prepare the claim for free at their cost, and charge what’s known as a contingency fee if the claim is successful. That has tremendous appeal to business owners, as the fees of 15-30% of the claim (that’ a typical range) are only paid if the claim is successful and your funds are received.

Note – You can of course pay a straight fee to prepare the claim, which will almost always be less then the contingency fee . Considerations are : CASH OUTFLOW / RISK .

Financiers of your claim will in almost all cases take a look at who is preparing your claim. If it is done by a legitimate recognized consultant with a track record naturally financing that claim becomes much more easier , because in SR&ED tax credit finance the main collateral for the loan is of course ' the claim '!

There's a lot of discussion in the industry these days, including the government around SR&ED consultants disclosing their fees - one concern being that high fees destroy the true spirit and effectiveness of the program.

We'll avoid those arguments and simply say that financing a legitimate and successful S R E D claim provides your company with cash flow and replenishment of research activities.


FILM/TV/ANIMATION:

The history of tax credit financing in the Entertainment industry has revolved around different cycles where the players and the programs change. Canada is now widely known for having a robust and generous tax credit program - with credits that are financeable in the same general manner as our aforementioned SRED claims.

So while the producer owner of Canadian content runs around town chasing private equity, hedge funds, and other ' alternative ' methods of financing projects one thing is always for sure - The film tax credit component will always be there to complete the funding cycle . It's more often than not the ' sure thing' component of the total capital plan for any project in film, animation, and television.

Firms that finance the tax credits, some Canadian banks included, like the tax credit programs because they reduce the risk of projects having to become commercially successful. After the 2008 economic collapse all media financing, as in other industries, became more difficult. However financing tax credit claims continues to remain a stable component of the capital structure of any project.

So while senior debt, ' gap' financing, advertising dollars, and pre sales all are challenge producers always know that a key component of their financing, the tax credit collateral is going to be there. Our Bottom line ' It's great to have a ' hit ‘, it's even better to have a tax credit'!

Tax credits in these programs are a combination of federal and provincial credits which can be monetizing after (or in some cases during) your projects. It's all about Canadian content and Canadian spending. The two types of credits are the CPTC and the PSTC. A significant amount of labor and production spending can be claimed.

Similar to the role of the ‘ consultant ' in the SR&ED program the most effective claims in media tax credits are prepared by Film tax credit accountants who specialize in maximizing the value of your claim.



Financing tax credit programs in film and SRED is not complicated. A simple application process exists for each type of claim. Financing, typically by a non bank finance firm is structured in the form of bridge loans. No payments are made until the government funds are received. Advances of 70% of the value of your claim are a typical range you can expect for either genre of tax credit.

Yes, believe it,

SR&ED and film tax credits can be financed - they provide Billions of dollars of funding each year. If you want to 'get it right' in financing your claim seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the financing of your 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 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 Park Avenue Financial = SR&ED And Film Tax Credit Financing 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

Phone = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Stan Prokop

Government Tax Credits In Canada . Are You Underly Financed Around Your Sred And Film Non Refundable Credits?

Plain English Tax Credit Financing – Film to SRED


OVERVIEW – .Information on financing government tax credits in Canada . SRED, film and digital media projects are 100% financeable when it comes to federal and provincial non refundable programs claims



Government tax credits. While many view SRED (SR&ED), Film, Animation and other non refundable tax credits as the proverbial cash grab we try hard not to weigh in too much on the merits or non merits around this area of the ' public purse'.

What we do weigh in on though is the fact that numerous types of tax credits are 100% financeable in Canada, so whether its a SRED manufacturing or software credit, or a film TV or animation project we want to ensure Canadian business owners, producers , etc understand that tax credits can be ' cash flowed '! Let's dig in.

The SRED program has been around a long time - it has undergone fairly significant changes recently but still is relatively intact, and, as we said financeable, as always, in the same manner. While the focus of the government is to ensure that SRED claims aid in the technological advancement of Canadian business owners and managers simply want to stay competitive, grow their company, and know they can, if needed, finance their tax credits.

Somewhere between 3-4 Billion dollars each year are claimed by companies who, either on their own, or with the aid of a SR&ED consultant file claims.

When you finance a SRED claim it does not have to have final approval Vis a Vis a final audit, etc. We do hasten to add though that while a claim prepared by yourself is financeable, typically more weight is provided when it is prepared by a professional.

The other area of government tax credits in Canada that are quite popular, and oh so non related, is the credits that are available in the FILM, TV, and DIGITAL MEDIA/ANIMATION industry. These credits can help to provide total financing for projects pretty well up to the 40% range. While SRED claims focus on inventing or improving a process or a product the media credits tend to simply be in projects that inform or entertain. It is interesting to note in some cases that a film//TV/animation project might also have a SR&ED claim attached to it. Talk about a double whammy.

Clients are often asking what is in fact eligible spend on the media type projects. Its things like salaries and wages, tangible expenditures, service contracts, etc.

Canadian tax credits compete with American and European jurisdictions who in fact offer similar programs. It’s quite acknowledged that the Canadian tax credits are in fact the best, certainly they seem to have proven to be most reliable. For certain media tax credits you require a pre approval certificate from the government and key personnel, i.e. the producer for example should be a Canadian citizen.

Tax credits don't have to be a complex area when it comes to financing. If you have a good SRED consultant, or a solid Canadian tax credit budget a trusted, credible and experienced Canadian business financing advisor can assist you in cash flowing your non refundable credits into working capital for your company or project. Don’t be ‘ underly financed’!




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 PARK AVENUE FINANCIAL = CANADIAN TAX CREDIT FINANCING








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

OMG ! Tax Credit Financing Is Alive And Well For SRED And Film And Animation Video Incentive Credits In Canada. Yes You Can!

Is That Weird Or What – You Can Finance Tax Credits In Canada?!


OVERVIEW – Information on tax credit financing in Canada . Sred ( SR&ED) film, tv and video animation credits can all be financed / monetized for cash flow and working capital .



You're forgiven. Simple as that. For what ? For not knowing that tax credits can be financed in Canada ; and we're talking about two specific ones, the SRED ( aka SR&ED) non refundable tax incentive, as well as film , TV and animation FX credits .

Tax credit financing is simple relatively unheard of unless you're familiar with the industry , or even better, have a need for cash flow and working capital for your company or specific project .

Some have called it a lucky break, whatever you choose to call it monetizing tax credits in Canada can help you access capital needed.

As we said we're focusing on two key types of tax credits - one related broadly to the film and TV industry, and the other related to Canadian research and tax credits.

Let's focus on the former first. The Canadian government, on a combined federal and provincial level spends hundreds of millions on what they term as incentives for the film, TV and animation industry. As the borders broaden for these genres some refer to them as ' transmedia'.

While it's no secret that government budget cutbacks are pretty well everywhere these days to the surprise of most the film / television production tax credits remain strongly in place. In Canada these credits are a combined credit at both the federal and provincial levels. Generally speaking all provinces have a program in place; the reality is that British Columbia, Ontario and Quebec seem to have the brunt of the action when it comes to actual content filming, production, etc.

From the governments perspective Canada reaps economic benefit from the industry, i.e. employment, taxation, cultural attributes, etc. And if you're an American production shooting or producing in Canada you are still eligible for the tax credits, as well as the financing. At the end of the day we can simply say that the larger the production the larger the tax credit and available cash flow if you choose the financing route.

While the rules for qualifying for and calculating tax credits might be considered complex by some (not if you have a good tax credit accountant) the actual financing of these claims is a lot simpler. Being able to provide both a realistic budget , as well as domiciling your project in a special purpose entity , as well as being able to validate your actual spend via payrolls, purchases, etc is key to the financing of your claims.

Financing of film, TV and animation credits (animation credits seem to be the fasted growing part of the industry) is typically done on a ' bridge loan' type basis. Approximately 70% of your claim is advanced to your project, based on the tax credit, once you have filed. The balance is paid to your firm on receipt of your federal and provincial funds, less the financing costs which vary depending on size of claim, quality of your project / mgmt team, etc.

Let's move on to our second type of tax credit financing we're covering today, that's the SRED program.

Again, billions have been committed to the program, and despite some radical updates to the program we can safely reiterate that your SR&ED tax credits can be financed also. Claims are financed in relatively the same manner, it 70% loan to value, and no payments are made during the course of the ' bridge loan '. The most interesting part of SR&ED financing is that some newer finance innovations are in place - including the ability to finance next years claim before you have filed. And in some cases an actual business line of credit can be set up allowing you to draw funds for your spend . That's creativity!

And the requirements for a SRED financing? It's not rocket science, unlike some of the actual research itself. You need to demonstrate you can produce business financials, your claim should be prepared by a qualified SRED consultant, and you need to be in a position to allow the claim to be collateralized if in fact some other financing party to your company is claiming security on the SRED. That’s usually achieved by a simple postponement of claim in favor of your SRED finance firm.

So our bottom line today - whether you're part of Hollywood North, or in the lab or on the shop floor you have access to a very powerful tax credit financing that is both creative , flexible, and provides capital for your company or project .

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your SRED or film/tv/video tax credit financing needs .

7 PARK AVENUE FINANCIAL
CANADIAN TAX CREDIT FINANCING EXPERTISE


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 :


http://www.7parkavenuefinancial.com/tax-credit-financing-sred-film-video-credits-tv.html














Stan Prokop

Financing Your SR ED Tax Credit in Canada

Not everyone Canadian business owner or financial manager takes advantage of the Canadian Governments SR & ED (Scientific Research & Experimental Development) tax credit program. It’s clearly in our opinion of the best and truly legitimate and valuable programs that a government provides for its business entrepreneurs in Canada.

7 PARK AVENUE FINANCIAL
CANADIAN SR ED FINANCE


Many, when they hear of the program for the first, are amazed that they can receive significant funds, that are non – repayable (yes that’s non -repayable!) for their ongoing investment in research, product development, business processes, etc.

And, those that do take advantage of the program dutifully wait many months, in some cases a year or so or more for their cheques from the provincial and federal government.

Why not borrow against these funds and utilize those funds for much needed working capital and cash flow to further fuel the growth of your firm.

SR & ED financing is still relatively unknown in Canada – it is clearly a very specialized type of financing, somewhat ’boutique’ let us say, in nature.

The government, via the program, wants to provide funds to Canadian business so they can continue to further their research and development and provide Canadian firms with a lead in technology and business.

So lets get back to the financing of the SR ED, aka ‘ SHRED ‘, aka ‘SR &ED’. SR ED Loans are typically for approximately 70% of your combined federal and provincial claim. The claim can be financed as soon as you have formally filed the claim with the government, which is at the same time you do your year end tax filing.

SR ED applications can be filed for the last two years, so on occasion your firm might in fact have a significant receivable generated by virtue of that filing you have done. Our observation is that some companies actually book that receivable in their financial statements for the full amount of the claim. Some companies take the conservative approach and only record the cash coming in when it is received from the government.

So, you as a business owner or financial manager of a Canadian company are asking yourself the obviously – if I book the SR ED as an account receivable, will my bank provide financing for it. Our experience is generally ‘no ‘they will not. Canadian chartered banks, being somewhat more conservative in nature, recognize the SR ED claim may or may not be approved. So if there is any risk in your financial structure as viewed by the bank they will not advance funds.

The private sector of Canadian finance is in fact doing the SR ED financing. Claims are financed on the basis of your firms overall financial status, although we add that even pre revenue companies or companies that are losing money can still obtain SR ED financing.

Every Canadian firm that files a SR ED claim should consider financing the claim if they feel the additional cash flow and working capital will assist their company in continued growth and success. Talk to an expert and use this alternative financing as a great way to boost cash flow.




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 7 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 :


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

No ‘ SRED ‘ Of Doubt ! SR And ED Tax Credits Finance Via A Bridge Loan Is Still Here !

SR&ED Finance – Alive And Well


Information on sred bridge loan finance in Canada . Despite recent changes to the program your s red ( sr & ed ) tax credits are still eligible for financing .



SR & ED Tax credits. Did you or your firm have any doubt about the SRED program in Canada? I think we can safely say thousands did, and the good news is that the SRED Program is still intact... yes some changes, but still alive and well .

And even better news? Your SR ED claim is still 100% financeable with the same criteria that have always been in place.

Let’s step back a bit. Naturally the thousands of business owners in Canada who receive a total of Billions, yes that Billions with our capital ' B ' were concerned about what many felt was the best research tax credit scheme ever, the Scientific Research and Experimental Development ( hence ' SR & ED ' ) program .

Criticism and hope abounded from every direction. The government wanted to ensure that funds spent were getting Canada an appropriate return on investment - which seems like a reasonable request for us taxpayer type folks. At the same time thousands of firms used the refundable tax credit as valuable cash flow and working capital to both survive, grow or start their business, and to be able to invest even further in next years r&d.

Many felt the program was too complicated. We're not lawyers, accountants, or government mandarins, so there’s certain issues we won’t weigh in on, and that’s one of them!

The reality is though that close to 4 Billion dollars was being doled out every year to almost 25 thousand firms in Canada, which was a huge portion of the government R&D subsidy. And it was all about return on investment as we said;

Who in fact is benefiting?
How are they benefiting? Etc!

A major report that was widely anticipated concluded that a reduction of the program was appropriate and needed, and that the better choice was for strategic financing initiatives that would bring a better ROI.

Anyway, its over, if in fact the federal budget that was table will be ratified by the government. So yes, there will be changes in how your expenses are computed, and in some cases they will be reduced. Capital expenditures, which were often a large part of the calculation seems to have been eliminated... again futher reducing your total refund.

Certainly the onus is on the industry's private SRED Consultants to prepare higher quality claims and in some cases address their fee structures from a viewpoint of optics.

Anyway, that’s the news from the top! But down here at the bottom, where we toil in the real world sred (sr & Ed) tax credits are still financeable via a bridge loan for the finance of the credit.

The criteria are still the same. Your SR ED claim is generally financed at 70% loan to value... the transaction is structured as a bridge loan with no monthly amortized payments. You receive the balance of your claim, i.e. the other 30% when the claim is audited/approved, less financing costs.

Basic back up info is still required, i.e. a copy of your claim, confirmation of your firms arrears or non arrears to CRA, and your financials. It's as easy as that.

Did you have that ‘ SRED OF DOUBT ‘ ? ! The dust has settled, and if you want to finance your claims via the SR & ED bridge loan speak to a trusted, credible and experienced Canadian busines financing advisor today.







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 7 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 :

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

A SRED Reboot? Maybe , But Not For Your SRED Financing Needs! Finance Your SR Tax Credit Consultant Claims Today

SRED Is In The Garage Getting Fixed , But SR&ED Financing Still Works !


Information on SRED financing in Canada . You Can still finance the claim prepared by your SR&ED consultant . Tax Credit Monetization works for cash flow still works!




We're all familiar with the good news / bad news phrase. So which do you want first? We're optimists, so let’s go with the good news. SRED financing is alive, well and kicking. We're not sure your SR&ED consultant is as happy and bullish as us these days on the sr&ed consultant outlook as a whole. The reason. Seems the good folks in Ottawa aren’t 100% happy with the program; at least that's our interpretation.

While thousands of firms are still aggressively planning to file claims via their Sr&ed consultant for their non repayable tax credit refund just as many might be wondering if financing that claim is still valid and accessible . The answer - a resounding yes!

Statistics in recent years show that over 20,000 claims annually, if not more are filed by firms just like yours. And as a note from our view in the trenches, all of those firms still view that tax credit claim as a key, if not major source of financing for their firm. It's the private companies in the SME ( small to medium enterprise ) sector that file the majority of those claims .That cash flow, when received allows them to do a number of things, including furthering additional r&d, starting or furthering revenue and marketing , and by virtue of that Sr&ed work maintaining their particular dominance in their niche .

Supposedly the worst news seems to infer that claims will either be reduced in some manner, or eliminated to some and focused on others.

Again, we'll leave that to the experts, pundits, and oh my god the politicians; we'll focus instead on the monetizing of those claims into real cash flow and working capital.

Your SRED financing can take one of two forms in Canada. You can cash flow your claim anytime immediately after you file it, or alternatively (with a bit of a track record behind you) you can finance your claim on an accrual basis.

The accrual concept is becoming increasingly popular as it simple fast tracks cash flow re your R&D spend. In essence you're recovering a portion of your R&D as you spend on it. That’s a solid business premise as most Canadian business owners and financial managers would agree.

SRED finance is agnostic to who prepares your claim, if, and it’s a pretty basic if, your claim is prepared by a bona fide Sr&ed consultant with some level of credentials and expertise. As the majority of sred consultants seem to work on contingency naturally they are in some ways more at risk than your firm, so it’s quite easy via references to find a suitable party to submit your claim. Ironically it seems that the consultants themselves are somewhat under attack in the program, but again, that's hearsay.

The actual financing of your tax credit. Simple, as we stated. We explain to clients that they should view the process as a standard business application that is secured by the tax credit claim itself.

Other key aspects of the Sred financing? The basics are as follows: 70% loan to value funding for your filed claim. Typically no payments are made during the duration of the loan, and final adjustments are made at government finalization, returning to your firm the balance of 30% less financing costs. Accrual financing for your tax credit claim might be funded at a lower loan to value.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your tax credit finance loan today.




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 7 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 :


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

Discuss Among Yourselves - Financing SR ED ( SR&ED) Tax Credits Turns Your Claim Into Business Cash Flow Loan - SRED Claims Finance

Financing Your SR&ED Claim Is Still A Great Cash Strategy


Information on SRED ( SR&ED ) tax credit financing in Canada . A SR ED loan or the financing/discounting of your SRED Credits and claims monetizes your claim into valuable working capital .





So, the excitement continues to build, SR ED tax credits are a large part of the focus on what the government of Canada should be doing to help Canadian firms with their research and development. SR&ED claims total in the billions of dollars and have come to the attention of a lot of players in the private and government sectors. It's a pretty basic discussion, revolving around the question ' Is the SRED tax credit still working for government and business.

Let's highlight some of those issues, and key info on the program, but, most importantly, lets re enforce one key point - if you have a SR&ED claim you can still finance it , all the turmoil around the program notwithstanding ! And we'll show you how.

We hate weighing in on all those debates on the program, quite simply ours is to finance! But we guess it’s important that some of the key issues should be highlighted, and of course any major changes to the program will in fact probably affect how claims are financed.

So what the problem? Simply speaking it's that prudent people want to ensure that the tax system and the innovation around things such as tax credits work.

A lot of the discussion seems to revolve around what happens after Canadian business owners file their SRED claim. Simply speaking, the discussion is all about ' commercialization ' of the work and funds that go into those SR&ED credit claims. Currently the actual credits are primarily only available to private companies and there seems to be some discussion about moving the program into the public company sector. That seems to make sense because it would seem some early stage companies actually don’t go public via an IPO or RTO simply because of the fact they would lose their valuable SR ED claim status, and the non repayable cash flow that come from that program.

A number of current factors make the up calculation of the total combined provincial and federal tax credit SRED claim. Under the current guidelines companies can receive up to 1/2 to 3/4 of all they spend on key documentable Sred.

So it’s an interesting time for the SR ED tax credit. To the many hundreds of sred consultants out there who prepare claims we can only imagine where their heads are at these days.

But as we said, the one constant of SR&ED is that you can still continue to cash flow and monetize your claim via a SRED Loan. In fact the industry has gotten more creative and many financings are now done prior to the actual filing of the claim. This concept is called accrual financing and it simply means you recoup your expenses as you spend. Now that’s a true financing benefit for firm who can use the SR ED claim cash flow to survive and grow. (And we guess hopefully commercialize their products also!)

The financing couldn’t be simpler. be prepared to document your SR&ED work through your consultant or internal team. Claims are typically financed at 70% of total value, and no payments are made during the loan outstanding period.

Consider talking to a trusted, credible and experienced Canadian business financing advisor on monetizing your tax credit for critical cash flow.





AUTHOR - STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING !

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

Why Canada Provides Film Production Tax Credits & SRED Tax Credits – Financing Film & SR ED Tax Credits

We don't care. How’s that for a short and concise answer as to why we think the government of Canada provides hundreds of millions of dollars in Canadian film and production tax credits, as well as the ' SRED ' (aka SR&ED) tax credit.

What we do care about is how clients can use those two great Canadian tax credits to maximize the value of their film, TV, and animation projects, or if we're referring to SRED itself, then their ability to recoup a huge amount of their research and development expenses.

Not to be so glib, but we don't think ours is to second guess or question why the government of Canada provide all this funding for these two unique non repayable tax credit grants .

In the case of the film TV and animation industry the government seems to be returning almost 25% of all the revenues that the industry spends in Canada - that’s of course a huge amount.

And the SR ED ( Scientific Research and Experimental Development ) program returns billions ( yes that’s billions with a capital B !) to privately owned Canadian firms who recoup up to 40% or more of their total r&d expenses in the form of non repayable cheques issued annually to firms such as yours, ( as well as your competitors ) .

Let's focus on the film production tax credits first a bit. There's no business more intriguing complete with stars, egos, and great stories such as the entertainment business - we're talking 3 critical aspects of that - film, televison, and animation - the latter becoming very popular . No business financing challenge is more daunting than putting together the finances for these productions.

That’s why the knowledge that Canadian productions or co - productions (isn’t Canada Hollywood North?) take advantage of the film tax credits that can fund up to 40% or more of your budget. Your ability to then monetize that credit, during, or after production) can make up for a huge amount of your working capital and cash flow needs, for this project (or your next one!).

Let's also pay due respect to the SRED (SR&ED) credit in Canada. This program is probably the largest tax credits provider in the country. Canadian firms get refunds, via a non repayable cheque for the advancement of their R&D processes and innovations.

We continually remind clients in both the Film area as well as SRED that their claims can be financed and monetized for instant cash flow and working capital. If you are not one to wait (who can in business) film production tax credits and sred credits can be financed in a variety of manners.

Whether you're in the film tv and animation industry, or your firm is a manufacturing , service or technology company in Canada take advantage of those tax credits . And if you're reading this in Hollywood, remember that we have just shown you a way to finance 30-50% of your project. You’re welcome by the way!

Want more info? Speak to a trusted, credible and experienced Canadian business financing advisor in the area of film tax credits and sr&Ed credits. Like us, don’t question the why of the program, focus on ' why not for us?!’



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 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

SR ED Tax Credits Are Under Attack! Financing SR ED claims Is Business As Usual – How SRED Finance Works

Whew! It's getting ugly out there! Canada’s sr&Ed Tax credits are under attack in a number of different manners. We'll review some of those criticisms and prove to you that financing sr Ed claims is totally... business as usual... if, and its a big if, you know what you are doing.

A recent Canadian national headline story screamed ' flawed r&d scheme cost taxpayers billions '. First of all, it’s not a scheme... it’s a program. (I am secretly hoping my old age pension is not a scheme) We're talking of course about the Canadian Scientific Research and Experimental Development Program - aka ‘SR ED ', 'SR &ED '.

The program has gained significant traction over the years, and not hard to understand why, when the essence of the program is that Canadian privately controlled firms are the recipients of billions of dollars of funding every year, in the form on a non repayable, real money cheque for a large percentage of their research and development. Thousands of firms all across Canada apply every year.

At its essence the program is clearly ' apple pie ' and ' motherhood ' - simply Canadian firms investing hard earned dollars in research of products and processes to further their competitive positions here in Canada, and of course globally, where it counts .

So whats the problem. It's hardly late breaking news to us, but the core issues around the current ' sr ed claims crisis seems to focus on who is preparing them , the dollars that are sometimes wasted or abused in that process, and the governments inability to validate every claim to the level they would perhaps like to .

Who would not agree as a taxpayer or a reasonable person that we would all prefer our tax dollars to be going to programs and things that work. That brings us around to our other core subject area - the financing of sr&Ed tax credits.

Firms in Canada have the option of either waiting for their cheque, which can takes months to a year, of monetizing their claim immediately for cash flow and working capital. In many cases this is the largest one time amount of funds that many new and emerging companies receive.

So why isn’t their a concern over sr Ed financing? That’s because it’s a common sense process based on the quality and size of your claim. A typical financing involves a straight forward business application, with copies of your technical claim and tax filing showing the sr&Ed tax credit has been filed. We spoke of the sred consultants that have proliferated the industry - the reality is that your claim is finance based on its having been prepared by a credible consultant with an industry reputation and experience. Even CRA, formerly Revenue Canada noted that ' the vast majority of claims are compliant '.

When you're financing claims the dollars count. The program itself allows for approximately 35% of your total R&D expenses as a total claim, as validated by yourself or your consultant. When you finance your claim you receive approximately 70% of your total claim as a bridge loan that balance held back as a buffer, and remitted back to yourself less financing costs.

Is there a bottom line? We sure think there is. Take advantage of a legitimate and great government program (not scheme!). Prepare your claim with the aid of a reputable expert consultant with credentials and expertise. If you wish to finance your claim seek the services of a trusted, credible and experience Canadian business financing advisor who will efficiently guide you through the financing process - straight to cash flow in the bank!

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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 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations

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

SR ED Tax Credits Are Under Attack! Financing SR ED claims Is Business As Usual – How SRED Finance Works

We're going to turn that one thing you need to know about equipment lending for your machinery finance and other lease and loan needs into a multitude of good news benefits !

Let's share and explore some tricks of the trade to make your equipment financing loan or lease strategy more profitable than you ever thought it could be, with options we are pretty sure you have never even heard of that have the potential to turn your lease financing of your assets into a profit center under the right circumstances.

Today we are focusing on the type of decision you make at the start of your machinery finance lease decision. We refer to machinery but of course we're referral to all tangible assets you choose to finance.

When Canadian business owners and financial managers comment the equipment lending process for their financing needs they often, unfortunately do a poor job of determining how they will handle the end of the lease option. This option can make or break the overall cost and profitability around your lease finance decision.

Let's use one practical example and demonstrate our point. Let's say you are following our advice and make a conscious decision that the asset will last you 5 years. (We are sure not talking about computing technology of course! - No 5 year terms recommended on technology!) What you need to do now is ensure that any analysis you make around the cost of ownership to the same term as you have picked for your lease. Mismatching those costs and benefits is highly inappropriate.

So, back to the core of our subject, which is the one thing you need to know - and that is that you have numerous profit and cut your loss type strategies at the end of your lease. Some of this is determined by what you sign up front, further enforcing our point that you need to view the whole equipment lending cycle in your mind at the start of your transaction.

Ok, let’s make some money, or cut our losses. How do we do that ? First of all , if you know for sure that you have a good handle on the assets useful life based on your experience enter into an operating lease , not a capital lease to own, thereby giving yourself the flexibility to return the equipment to the lessor at the end of term . Let the lessor take the risk on the asset and its disposition.

That same operating lease strategy has a dual benefit, if you are at the end of the term, and you think the asset is performing well and generating revenues and profits then agree to purchase the equipment from the lessor at the end of term. Dont forget that you and the lessor need to agree on what its true fair market value is.

Want to renew the lease at the end of our 5 year term - with a view towards still owning the asset. Then negotiate forcefully with the lessor for a reduction in your monthly lease payment. Can you do this? You sure can, because the lessor has already extracted all their profit on the original deal, having assumed you would terminate the transaction.

Here a true secret profit strategy. If you feel there is significant useful life in the asset consider purchasing it from the lessor at its fair market value and then sell or rent it to another firm who might need it. You just turned a former equipment lease liability into a profit center!

One final strategy is to purchase the equipment based on your knowledge of its value, use it for a specified period, and then trade it in for a new upgraded asset - thereby lowering your lease cost on the newer asset!

So, whets our bottom line. It’s simple. You need to be informed about the lease life cycle, understand what the equipment lending cycle is all about when it comes to your options and flexibility. Whether it’s a machinery finance loan, computing technology, or an aircraft, the ability to see your end of term options at the start of your equipment lending decision will make or save you thousands of dollars. Speak to a trusted, credible and experienced Canadian business financing and leasing advisor to reduce your costs and improve your profits by sound lease finance knowledge.
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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 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations

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

Have Ontario CRA Sred R & D Tax Credits ? Finance Yours Today For Advantages Of Cash Flow !

Maximize or minimize ? What's best in Canadian business. In the case of taxes it’s minimize! In the case of cra sred R&D tax credits it’s maximize for advantages of cash flow!

Whether you are in Ontario or quite frankly in any of the rest of Canada how could you not afford to file a sr&Ed claim for the R & D your firm does on its innovative products and services? We are of course talking about the Canadian Scientific Research and Experimental Development tax credit program which provides refundable funds for a very significant portion of the funds your Canadian business spends every year in this key area the economy - i.e. the competitive edge area!

And, getting back to our maximize or minimize issue, recent figure suggest that almost 4 Billion (yes that’s billion with a b!) of cheques are going out every year to Canadian businesses such as yours. As we have said in the past, we are pretty sure you want those cheques to be cashed by your firm and not your competitor, since the funds don’t have to be paid back.

So, lets assume you are aware of the program, (many aren't) and lets further assume you are using the program either on a first time basis, or, if you're very lucky, you're a repeat offender! You therefore should be aware that your claims can be financed so you can take advantage of cash flow and working capital that would be beneficial to your firm today.

Many sred consultants (they are the specialized firms that prepare these claims) tell us that a proper preparation of your claim can exceed your initial estimates of what you can received by sometimes 11-200%. So you ability to create CRA SRED R & D tax credits that are of solid quality , file the claim, and then finance it for working capital simply accelerates all the benefits of the program .

Do you have to finance your claim? ask clients often? Naturally the answer is definitely not, but we certainly think you should consider it. Think of your claim as simply an account receivable, which of course it is. It's just that it's a very high quality receivable because it is a non repayable cheque that’s due your firm from the federal and provincial government. So in considering financing the claim you can of course simply wait for your cheque , or you can monetize, or 'factor' , or ' discount ' the claim . (All those terms are interchangeable and mean the same thing.)

Are CRA SRED R&D tax credits difficult to finance if you want the advantages of cash flow. Well, consider we a bit biased but we don’t think so, it’s a simple business financing application, with the additional back up being your sred claim and the required ability for your firm to be able to offer the tax credit up as collateral.

Speak to an experienced, trusted, and credible Canadian business financing advisor today to get more info on either the program itself of the financing of those R &D tax credits.

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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 7 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_cra_ontario_r_d_tax_credits.html

How To Finance CRA Tax Credits For Sred for Cash Flow Now in Canada !

Let’s kill two birds with one stone actually … should you consider financing your sred sr&Ed claim, and, how do you do it once you have made that decision.

As a Canadian business owner and financial manager your recognize that cash flow is king, and for many companies ‘ unlocking ‘ the cash flow they have tied up in CRA tax credit research claims is a solid business financing strategy . We are all familiar with the age old expression... ‘Pay me now or pay me later ‘. In the case of sred financing it becomes a similar question ‘ should I wait for my cheque from the government, ( which could actually take a year or more ) or should I finance that claim and put that cash back to work now . Your sred research keeps you competitive, so why not re invest those funds and get them working as quickly as you are able to.

When you finance your sred claim you are in effect discounting, selling, or we can even use the word ‘factoring ‘the claim. You may or may not have chosen to book the sred as an account receivable, that’s your call, but we can assure you if your claim is valid that it is a true receivable and can be monetized for cash flow and working capital now.

In general in Canada banks and tier one institutions do not finance sr&ed claims, so you should seek the advice and assistance of a experienced, credible, and trusted sred financing advisor who will assist you in monetizing your claim . The entire process can be completed in a matter of a couple weeks , and we often liken the sred financing process to any other business financing that you would contemplate – meaning simply you apply, you supply documentations on your business and the sr&ed claim, and if you qualify then your claim is financed.

We hate to hit you with another age old cliché, that being ‘time is money ‘, but quite frankly the essence of our info focuses on that statement. By that we mean that if you have a sred claim, and you have filed it already, and you are days, weeks, or perhaps a month or so away from getting your cheque, well... clearly it might not make sense to fiannce your claim. However if you haven’t filed your claim yet, or you have just filed it and haven’t had a technical or financial audit on the claim then clearly if you need the cash flow back from your r&d investment then consider financing the claim .

A ‘how to ‘for financing your sr&Ed couldn’t be easier – let’s cover off the simple basics chronologically.

They are as follows:

Determine you are eligible for the sred program
Prepare a claim
File a claim
Do some math around how long it will take you to get your money and what you could do with 70% of the claim funds being in your bank now. ( Claims are usually financed at 70% loan to value)
If the math makes sense work with a sred finance partner to submit an application with back up on your claim, who prepared it, and other very basic info on your firm.
It’s as simple as that. Weigh the cost of the financing against your opportunity cost of capital and how you would employ those funds to generate sales, profits, and greater return on capital.

The SR&ED program is probably the best government support program out their for Canadian business and industry. Take advantage of your share of the billions of dollars that go out to you in the form of non repayable grants for your investments. If it makes sense finance the claim and accelerate your cash flow and working capital.
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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 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/finance_cra_tax_credits_sr_ed_financing.html

CANADIAN BUSINESS AND FREE MONEY !

I am often asked by customers if there are grants and loans available for their businesses . On many occasions these firms are in the start up phase and are pre-revenue.

There is a general belief that there is ' free money ' out there , and people are trying to find it ! I categorically can state there is no free money available , but we can come pretty close !

There are some excellent programs, two in particular, that are , in our opinion, best government programs for firms in Canada .

The Canadian government has allocated hundreds of millions of dollars into what is known as the CSBF loan program - The acronym stands for the CANADIAN SMALL BUSINESS FINANCING program . The government provides a lot of data at its website on the history and operation of the program and its parameters . Some business owners might find the wealth of information overwhelming .

For the purposes of this article we will share that the prOgram is available to all new or established businesses with revenues or projected revenues under 5 Million dollars.

Most people that are familiar with the program might not know that in the current 2009 world economic crisis that the goverment increased the amount of these loans to $350,000 and $500,000.00 in some circumstances.

How can you qualify for this program ? Most importantly , do you qualify ?

In general if you are a Canadian private company ( Public companies are excluded from the program ) you are eligible for the program , Only certain classes of assets can be financed .

The true power of the program is that the rates are currently in the 5% range, they are mandated under the program to be only 3% over prime . Terms of repayment are 5-10 years, and most importantly to company princiapals , a full personal guarantee of payment is not required .

Typically these programs are used by companies to acquire assets, improve their business, purchase or develop software, and even in some cases buy real estate .

Do Canadian business owners know that the government can assist them in purchasing business real esate , without unlimited guarantee, and at great rates ? We dont think so !

If businesses feel they are adequately prepared to source out the financing available under this program we strongly recommend that they begin that process. Not everyone has the time, financial skills, and the ability or comfort level to begin this journey . Those firms should seek out an experienced and trusted advisor in order to maximize their particpation in the program .

Lets get back to free money . Does it exist ? Again, not really, but would you as a business owner like to receive a chq from the govt, that is not repayable! regarding any process, research, or innovation you have developed .If so you want to maximize participation in the governments SR ED program . We will talk about this programme more in an upcoming article .