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

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YOUR COMPANY IS LOOKING FOR A CANADIAN SR&ED FINANCING 

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

You've arrived at the right address! Welcome to 7 Park Avenue Financial

        Financing & Cash flow are the biggest issues facing businesses today

                              ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

FINANCE YOUR CANADIAN GOVERNMENT SR&ED CREDIT REFUND  

 

  

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

 

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

 

 

WHAT IS SR&ED? 

 

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

 

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

 

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

 

  

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

 

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

 

 

ELIGIBLE SR&ED EXPENDITURES 

 

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

 

 

THE BENEFITS OF THE SR&ED PROGRAM 

 

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

   

THE ROLE OF INDUSTRY SR&ED CONSULTANTS   

 

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

 

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

 

SR&ED FINANCING - WHAT YOU NEED TO KNOW!

 

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

 

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

 

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

 

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

 

 SR&ED LOANS DO NOT HAVE MONTHLY PAYMENT OBLIGATIONS 

 

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

 

 FUNDING IN 2 WEEKS! 

 

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

 

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

 

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

 

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

 

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

 

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

 

  

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION  

 

What is the sr&ed expenditure limit?

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

 

 

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

SR&ED Tax Credits - Lowest Cost Financing for SR&ED Tax Credit Loans in Canada

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YOUR COMPANY HAS CANADIAN SRED CREDITS AND WANTS TO EXPLORE THE FINANCING OF YOUR SR&ED CLAIM! 

LET SR&ED FINANCING BE THE GROWTH FUNDING YOU ARE LOOKING FOR

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today 

                              ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

 

SRED FINANCING IN CANADA 

 

Canadian business owners and financial managers who file for SRED credits are often not aware that these claims can be financed in order to generate working capital and cash flow out of the claim.

 

 

They are even more surprised to hear that it is actually possible under most conditions to obtain financing even prior to financing the claim.

 

WHAT IS SR&ED DEBT FINANCING

 

SR&ED debt financing solutions allow businesses to monetize their  SRED refundable tax credit in advance of receibing their cash refund from the CANADA REVENUE AGENCY/CRA.  The SR&ED  credit is in effect an account receivable and the company can fund this receivable as it requires for working capital and cash flow needs. The term 'sred factoring' is similar to any commercial accounts receivable financing.  The sred bridge loan advance against the receivable is repaid when the government tax refund is paid to the company.

 

The term sred is used by many business people instead of the formal name of the program, which is the Canadian Scientific Research and Experimental Development (SR&ED) program - which is in fact a tax incentive from the government - Another synonymous term used similarly is  ' shred'

A the end of the day it's all SR&ED!

 

SR&ED TAX CREDIT FINANCING FOR R&D BUSINESSES IN CANADA

 

What could be a better working capital and cash flow strategy than getting immediate cash flow for a government grant that is non-repayable? We frankly can think of no other risk-free way to bring valuable cash funds into your company if you are utilizing this great government program.

 

 

HOW SR&ED FINANCING CAN FUEL YOUR R&D IN CANADA

 

Are you taking advantage of one of the two most successful government programs in Canada - The r&d tax incentive?  Unbelievably there are still thousands of firms every year who either don't even know about the program, let alone use it!  Talk to a sr&ed expert to determine if you are due for your share of the 3 Billion dollars + that is doled out by the government of Canada.

 

By the way - that other successful government program? It's the Canada Small Business Financing Program, which is a lump sum term loan government guaranteed financing in participation with numerous Canadian financial institutions such as  Canadian banks and credit unions.  Other programs offered by the government under grant financing are also available.

 

UNDERSTANDING SR&ED TAX CREDIT FINANCE

 

Let’s establish some bedrock around what we are talking about. The program's formal name of course is the Scientific Research and Experimental Development aka ‘SR&ED program' that is funded by the federal and provincial governments. Each SRED claim has a federal and provincial portion, and, combined, they provided you with a non-repayable tax credit for a significant amount of the funds you spend on qualifying R&D and business processes.

 

 ELIGIBILITY FOR SR&ED FINANCING IN CANADA - WHAT THE BUSINESS OWNER NEEDS TO KNOW

 

Is your firm eligible for SRED Financing?  CRA clearly outlines the criteria for the sr&ed tax incentives. It boils down to 3 key areas - your ability to demonstrate technological advancement with the purpose of enhancing technical knowledge. Secondly, there must be an element of technological uncertainty in your work and your company's ability to demonstrate your goal of overcoming that uncertainty and those technical challenges.

Finally, the firm must show the processes that have been taken to resolve uncertainty in their r&d.

 

THE ROLE OF THE SR&ED CONSULTANT

 

Many clients we work with have their claims prepared on a contingency basis – that simply is letting someone else, known as an SRED consultant, prepare your claim and let them absorb all ( yes all ) of the cost of that claim. When you finance an SRED claim you can actually arrange to have the SRED consultant paid at the same time also.

 

Sred consultants will work with you and your accountants to file the actual sr&ed claim under the year-end T6661 form which is the actual claim for sr&ed expenditures. A technical narrative of your claim should accompany the filing as well as detailed calculations and backup on sr&ed expenditures.

 

 

SRED claims continue to be on the rise in Canada, and when you couple the filing of those claims with a somewhat challenging financial environment for business financing you have a perfect storm, so to speak, for the consideration of financing your claim.

 

The financing of SRED claims is the ultimate ‘boutique' financing business in Canada. We urge clients to work with a business financing advisor who can ensure they are receivable maximum funds and market rates, terms and structures for the amount of the claim. 

 

Clients want to know how ‘complex' SRED financing is. The reality is that you should view an SRED tax credit financing in exactly the same manner as any business financing, other than to understand perhaps that the main collateral on the SRED loan is really the claim itself. We use the word ‘SRED loan' but in reality, the SRED financing brings no debt to the balance sheet – you are simply monetizing your claim for cash flow and working capital now.

 

  

UNDERSTANDING THE SR&ED FINANCING PROCESS - HOW IT WORKS  ( SPOILER ALERT- IT'S EASY!)  

 

The essence of the entire process can be simply described under the following process

 

• SRED financing application
• due diligence
• legal/documentation
• Funding!!

 

It’s as simple as that, and we advise most clients the entire process can be completed within a few weeks, which is standard for most business financings anyways.

 

  

WHEN  SHOULD YOU FINANCE YOUR SRED CLAIM?  

 

You would only want to consider SRED financing if in fact, you don’t want to way from 1-12 months, (sometimes longer) for your grant cheque from the government. As a Canadian business that is growing, you probably have much better uses of those funds now, including reducing payables, investing in even more R&D, acquiring new business assets, etc. Accrued sr ed expenditures can be financed as you spend.

 

 KEY TAKEAWAYS - SR&ED FUNDING 

 

SR&ED Refundable tax credit incentives provide billions of dollars every year in non-repayable funds  from CANADA REVENUE AGENCY / CRA for thousands of firms in Canada like yours who invest in r&d

SR&ED credits come in the form of a refundable tax credit, and for some firms such as public companies, there is an income tax deduction.

Different types of organizations can claim sr&ed credits  - that includes, most commonly CCPC's - ie private companies, as well as individuals, foreign-controlled firms who do the r&d in Canada, as well as private individuals.

Sr&ed credits can be as much as 35% of total sr&ed expenditures.

 

CONCLUSION

 

Talk to the  7 Park Avenue Financial team about how our sr&ed tax credit financing solutions  provide a solid alternative to cash flow needs for any business in Canada that utilizes Canada's sr&ed program.  We're a trusted, credible and experienced Canadian business financing advisor for Canadian businesses. The business capital obtained by this method of financing is in the form of short-term debt financing in the form of a bridge loan that does not dilute equity ownership in the critical early stage of the growth of a business.

Your firm can fund your claim after it is filed, or if you choose, financing can be provided in regular installments as you spend on r&d under better cash management

Consider SRED tax credit financing as one more toolkit you have in your overall business strategy to access capital. Work with an expert and maximize the amount of your return and the overall most effective use of that essentially free cash flow and working capital via a sr ed loan.

 

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK  MORE INFORMATION

 

 

WHAT IS THE CANADIAN SR&ED PROGRAM 

Canada's Scientific Research and Experimental Development (SR&ED) program from the Canadian government is a tax incentive under Canada Revenue Agency that helps Canadian businesses fund research and development around work under scientific or technological uncertainty - It is often a major source of revenue and cash flow for many early-stage businesses who are working on products and processes for Canadian or global markets . Companies must ensure they are eligible and that expenses file under eligible expenditures.

Firms will typically use experience sr&ed consultants to ensure they are eligible for the tax incentive. SR&ED tax credit financing options are available for companies wishing to monetize their claims in advance of refunds under the sr ed claim process.

 

 

HOW MUCH FUNDING CAN BE CLAIMED UNDER SR&ED CREDITS 

SR ED Claims can vary based on the type of firm that is applying for a sr&ed refund under their sr ed project - as claims vary between private CCPC's (Canadian controlled private corporations ) firms and other entities such as public companies. Typical claims are in the 35% range of qualifying expenses . Companies filing for the first time can receive first-time filing assistance from Canada Revenue Agency.

 

 

 

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

Canada SRED Tax Credit Program Financing . Still Here!

Here We Go Again . One More Time –

SRED Finance Loans Are Here To Stay


OVERVIEW – Information on the Canada SRED Tax Credit Program . Financing Your SR&ED Credit Is Still 100% Available!


The Canada SRED Tax Credit. We're reminded of Mark Twains great quote ' the reports of my death have been greatly exaggerated ‘, as there isn’t a day these days when we don't hear of the SR&ED Research credit under attack , even its demise predicted .

And there is always one trouble maker in the crowd. Witness Jan 23 / 2013 - a large article in Canada's national business newspaper - its headline said it all ' Too much support for small R&D '. They might as well have drop kicked Canadian innovators in the gut! , don’t you think?

The premise of that article was that the current approximately 44% non repayable subsidy that close to thousands (yes thousands of firms, including your competitors) of Canadian businesses get when they submit a SRED credit application.

The author, a ' researcher" ( isn't that like a consultant - 'those that can't teach consult..' ) stated that smaller firms that file SR&ED claims might not be having that hard a time in raising capital as one thinks. The author further maintained, and we totally disagree that many firms such as yours pay premiums for financing your business solely because outside investors and lenders can’t properly assess the quality of your R&D.

Again, incorrectly so in our opinion, the author maintained that small firms with track records can get ' favorable financing '. He must be dealing with different banks that we do on a daily basis, because clearly the SME sector in Canada is in fact challenged by growth financing. More so if you are a start up. 99.99% of the time we can safely assure our clients that the SRED tax credit is not directly financeable by the banks in Canada. And we stand by that assertion.

That same article maintained that the benefits of SRED credits are ' absorbed' by owners and employees of the firm. We have no idea of what he meant by that.

We will let Canadian business owner and others decide the true questions, whether the SRED credit provide a net benefit to Canadian business. What we can say with assurance is that your SR&ED credit is still financeable.

It is true though the SRED credit applications submitted by SR&ED consultants that you hire to prepare these claims will probably decrease in size and value because of recent changes to the program - one major one being the elimination of the capital assets used in the R&D work.

When all is said and done though our key point today is still the same. Your Canada SRED TAX CREDIT PROGRAM claim can still be financed. In fact, here's some great news, there have been many enhancements to the financing of SR&ED tax credits. Not only can you get a SRED Loan based on your filed claim, you are even eligible to borrow under next years claim .And in certain cases even a SRED credit line facility may be available to yourself .

SRED financing terms are still essentially the same these days. Claims are financed at 70% loan to value. No payments are made on the loan - so great cash inflow and even greater, no cash outflow !... and the remainder of the credit is advanced to your firm, less financing costs, when the claim is approved and paid by the government.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with financing your SRED (SR&ED) research tax credit when a SRED Loan makes sense.

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/canada-sred-tax-credit-program-financing-loan.html




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