Connecting The Dots In SR&ED Loan Financing In Canada : How Your Tax Credit Becomes Cash
OVERVIEW – Information on sr ed tax credits loan financing in Canada. SR ED tax credits loan financing monetizes your r&d capital investment . Utilize sr&ed finance loans to accelerate cash flow and recoup your investment in r&d
SR ED Tax Credits loan financing in Canada is all about ' connecting the dots ' in the process to recoup your R&D capital investment. That ability to understand the SR&ED process is somewhat best achieved by understanding how those ' dots' are connected.
Recouping a solid majority of your costs in the investment your firm has made in innovation in products and processes is what Canada’s Scientific Research & Experimental Development (hence the term ' sred’) is all about.
Whether your firm is a start up, emerging, or middle market private company in Canada the cash you spend in R&D probably plays a large role in your business financing mgmt challenges.
So what then is the ' game plan ' in SR&ED finance loans? Naturally it's all about ensuring you have a quality claim submitted in hopefully a timely manner. The ability to satisfy Canada Revenue Agency's requirements starts with your selection of a qualified SRED consultant to prepare the claim. We would add the reputation and quality of that persons work certainly aids in financing your claim as it simply adds credibility.
A large majority of Sred claims are eligible for a cash refund - hence the ability to finance your claim. (Some incentives require that you reduce your taxes payable with your claim). That refund can of course be used for any general company purpose, including more R&D to keep your company competitive.
Why then does financing your refund make sense? The basic reason is pretty simply - Your SR&ED refund is just that, a refund that is not repayable to the government. Thousands of firms therefore take advantage of the program and receive billions (that’s billions with a ' b'!) every year. So financing your claim does one simple thing. It accelerates your cash flow refund.
How does the SR ED tax credits loan financing strategy work ?It's a quick and efficient process involving submitting a standard application to finance as well as a copy of your actual SRED submission . Part of our ' connecting the dots' analogy involves how the different parties in an R&D refund work. Along with our aforementioned SR ED consultant your accountant is actually responsible for including the claim in your annual tax return. That starts the clock ticking for your refund.
How then does the loan work? It's essentially a ' bridge loan ' - with typically 70% of your total claim being turned into a loan with no set payment terms. The 'no monthly payments' scenario is finalized when the govt processes and sends your refund. At that time you of course receive the balance of your refund, less financing costs which have accrued over the ' waiting period'. That waiting period involves standard processing times by CRA, as well as the potential that some claims are reviewed from a financial and technical perspective.
If you're focused on speeding up cash flow and recouping a large part of your R&D investment consider SR&ED finance loans as a winning strategy - 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 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
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
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
