Financing SR ED And The Film Tax Credit Incentive In Canada : Twin Programs Under The Same Bridge Loan

Surely They Aren’t Serious ?

Business Tax Credits For SR&ED and Film/TV/Digital Projects Are Financeable?


OVERVIEW – Information on financing SR ED ( SR&ED) claims and the Canadian film tax credit incentive . Bridge loans for these two refundable credits enhance cash flow and working capital




SR ED and Film Tax incentives in Canada financeable? We're the first to admit it when we heard that many years back, but it certainly proved to be 100% true. Let's dig in.

The key word on these two programs is clearly ' incentive' because these two separately sponsored programs under Canada Revenue Agency are clearly incenting industry (when it comes to the SR&ED program) and Media (when it comes to generous refundable tax credits in the areas of film, TV, and digital media/animation).

While the financing of SR&ED credits via bridge loans has pretty well stayed the same ( in fact any changes have been actually positive!) the whole area of research tax credits has been the ultimate moving target

for a couple of years now . Industry, and the SRED consultants that prepare these claims, have clearly been scrutinized significantly, and all the ' adjustments' to the program have now been seemingly rationalized by all parties. In effect the program was perceived as ‘ not working ‘.

Those changes also in fact have affecting the claims that are financed, as in some cases SR&ED loans are smaller as equipment in the ' Capital expenditures' area is not eligible after 2014 , and as another specific example : outside contractor costs/expenses were also reduced. CRA also has invested more funds in the scrutiny and audit of claims.

Not all changes to the SR ED incentive were perceived as negative though... most view the streamlined online application form as positive, and those SR& ED consultants that for the most part perform their work on ' CONTINGENCY ' (they take a % of your total claim as their fee) certainly in many cases ' cleaned up their act '

as only credible consultants survived the scrutiny of their fees, reputations, etc.

Film tax incentives also offer billions of dollars each year to the Canadian media industry. It also involves an application process that in most cases is championed by a ' tax credit accountant ' - in effect a version of our aforementioned SR ED consultant. Different industry, same type of guy or gal!

As revenue opportunities abound and in fact grow due the rapidly changed method in which media is sold and then viewed Billions of dollars also are available to projects that properly qualify and file for film tax credits.

The success of the Canadian film tax incentive is clearly at the expense of other countries in many cases, as Canada does a great job of ' luring' productions under various co treaties, generous combined federal and provincial credits, and a reputation of fiscal stability and ongoing funding.

Have we forgotten anything?

Oh yes, just the main subject today, which is that FINANCING SR ED and the FILM TAX CREDIT INCENTIVE is 100% possible. A great recent addition to financing these two credit programs is your ability to potentially finance claims that are not yet filed, bringing even more cash flow into your company or project.

Tax credit loans are almost always structure as no monthly payment bridge loans, with the tax credit (SR ED or Film) as the main collateral. Naturally your financing claim has to have some depth, such as good management, potentially a previous positive claim record, etc.

So, serious? Absolutely. Consider financing trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in maximizing the true benefits of your claims - CASH FLOW!


Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

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



7 Park Avenue Financial = Canadian Tax Credit Financing Expertise



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' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Get the Most From Your SRED refundable credit – Financing Your SR ED claim with a SRED bridge loan

Of the many questions clients ask around the sr&ed (sred) program in Canada a typical one, actually two, is ' can we finance and our sred claim... and how is financing sr&ed grants done?'

Let's work through a short sred loan primer and cover off the basics, allowing you to better understand the potential benefits of financing your sred refundable credit, and , more importantly determining if it makes sense to finance that claim .

Sred calim percentages actually vary by provinces, because they are a combo grant that is administered and funded by both your province and Ottawa. While percentages of the amounts you receive might vary a bit between provinces for the purposes of our discussion we'll speak in general terms, because we are pretty sure you aren’t going to move your company location to increase your non repayable sred credit!.

Sred claims vary but in general they do not go much more than over a million dollars. You have the ability to finance your claim if it’s eligible. We will also mention that if your company is perfectly willing to wait for your cheque that’s a good thing also, it just seems to us that if you can put non repayable tax credits to work to generate additional revenue and profits, well... that is a good consideration of financing our sred refundable credit.

A key to financing your claim is the quality of your claim. Three types of preparers are out in the marketplace - your company itself can prepare the claim, your accountant can, or you can use an expert, otherwise known in the industry as a sred consultant. Theoretically all three parties could prepare a claim that is financeable, but the reality is that your sred finance firm leans more preferably to the utilization of a sred consultant. That's simply because expertise in an area such as an R&D overview submission seems to make the most sense.

The government pays out billions of dollars each year to firms such as yours - so filing a claim, and considering the financing of that claim can be a key part of your overall company cash flow.

If your claim is a first time claim, and is less than straight forward there is a strong possibility based on current sred trends that you could wait close to a year for your refund. So the question then becomes, could your firm utilize effectively a sred loan as a bridge type financing for additional cash flow and working capital.

If you are answering in the affirmative then it’s simply a case of working with a trusted, credible and experienced Canadian business financing advisor to fast track a sred financing. Typical sr&Ed loans take a couple weeks or so to process; it’s a basic business application, with your sred refundable credit collateralized. Advances on your claim are in the 70% range and are typically structured as no payments, with the final 30% due your firm, less financing charges, at the time of final disbursement from Ottawa and your province.

A short summary of our shared info is very simple - if you qualify for sred then clearly use the program - if you don’t you are missing out . Want to wait a year for your money... great, keep us posted, the chq is in the mail. Want additional working capital and cash flow today out of your non repayable sred credit, then consider the sred loan financing program today. It’s as simple as that.
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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/sred_refundable_credit_financing_sr_ed_sred_loan.html