SRED Financing In Canada : The Power of SR&ED Loans

 

YOU ARE LOOKING FOR  SR&ED FINANCING FOR YOUR CANADA SRED CLAIM

The Insider’s Roadmap to SR&ED Financing Success in Canada

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

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Or Email us with any question on Canadian Business Financing

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Funding R&D: The Essential Guide to SR&ED Financing Your SR&ED Claim | 7 Park Avenue Financial

 

 

Revolutionize Your R&D: Smart SR&ED Financing Strategies

 

 

 

Introduction to SR&ED Financing 

 

In the realm of Canadian business innovation, the Scientific Research and Experimental Development (SR&ED) program stands as a cornerstone. It offers a pathway for businesses to engage in research and development with financial support from the government. Understanding the nuances of this program is crucial for any business looking to leverage innovation for growth.

SR&ED financing in Canada is revolutionizing how businesses approach and fund their research and development, unlocking unprecedented opportunities for innovation

 

 

Understanding SR&ED Claims 

 

SR&ED claims are designed for businesses that invest in R&D activities. These claims allow companies to receive tax credits or refunds, fostering a culture of innovation. The eligibility criteria for SR&ED claims are specific, focusing on projects that advance scientific knowledge or technology.

 

 

 

The Benefits of Financing SR&ED Claims 

 

 

Financing SR&ED claims can provide immediate cash flow, enabling businesses to reinvest in further R&D and operational activities. This approach helps businesses maintain momentum in their innovation endeavors without waiting for tax credit processing.

 

 

Navigating the SR&ED Financing Process

 

 

The process of financing an SR&ED claim involves several steps, starting from the identification of eligible R&D activities to the application for financing. It's essential to understand each stage to maximize the benefits. Learn More

  

 

SR&ED Tax Credits: Maximizing Your Benefit  

 

 

To make the most of SR&ED tax credits, businesses need to accurately document their R&D activities and expenditures. Proper documentation ensures that companies can claim the maximum amount eligible under the program.

 

 

  

  

Key Considerations for SR&ED Claim Financing    

 

When seeking financing for SR&ED claims, it's crucial to consider factors like the credibility of the financier, the terms of financing, and the alignment of the financing with your business's cash flow needs. Explore Options

 

 

Innovative Funding Solutions for SR&ED

 

There are various innovative funding options available for SR&ED claims, including traditional bank loans, specialized SR&ED financing, and venture capital. Each option has its own set of benefits and considerations. Discover More

 

 

SR&ED Investment Tax Credit: A Closer Look

 

 

The SR&ED Investment Tax Credit is a significant aspect of the SR&ED program, offering a percentage of qualified expenditures as a tax credit to businesses. Understanding how to maximize this credit is key to effective SR&ED financing.

 

 

 Expertise in SR&ED Financing: 7 Park Avenue Financial 

 

7 Park Avenue Financial brings decades of experience and expertise in SR&ED financing. Our team is dedicated to helping businesses navigate the complexities of SR&ED claims and financing, ensuring the best possible outcomes. Learn About Our Expertise

 

 Choosing the Right SR&ED Financing Partner 

 

Selecting the right financing partner for your SR&ED claim is crucial. Look for a partner with a deep understanding of the SR&ED program and a track record of successful financing arrangements. Find the Right Partner

 

SR&ED Financing: The Path to Business Growth

 

SR&ED financing is more than just a financial tool; it's a pathway to sustainable business growth. By providing the necessary funds for R&D activities, SR&ED financing helps businesses stay at the forefront of innovation.

 

1. Alternative Lenders Over Traditional Banks: While traditional banks are the go-to for many, alternative lenders can offer more flexible, tailored financing solutions for SR&ED claims. These lenders might provide quicker approvals and more personalized service. Traditional banking institutions are increasingly irrelevant in the realm of SR&ED financing, as their rigid structures and lack of flexibility hinder the dynamic needs of innovative Canadian businesses

2. Leveraging SR&ED Financing for Market Expansion: Beyond merely funding R&D, the cash inflow from SR&ED financing can be strategically used for market expansion activities, thereby turning a tax credit into a tool for broader business growth.

3. SR&ED Claims as a Strategic Planning Tool: Businesses can use the anticipation of SR&ED claim financing not just as a reimbursement mechanism but as a core part of their annual strategic and financial planning. This proactive approach can influence R&D direction and intensity, aligning innovation efforts closely with financial planning and business goals.

 

 

  

 

Key Takeaways  

 

 

1. SR&ED Canadian government initiative offering tax incentives for businesses conducting research and development. Understanding its scope and eligibility criteria is crucial.

2. Financing Benefits: SR&ED financing provides immediate cash flow, enabling continuous investment in innovation without waiting for tax credit reimbursements.

3. Claim Process: Recognizing eligible R&D activities and accurately documenting expenses are pivotal for successful SR&ED claims.

4. Choosing a Financing Partner: Selecting a knowledgeable and experienced financier in SR&ED claims is vital for maximizing financial benefits and streamlining the process.

 

 Conclusion: Empowering Your Business Through SR&ED Financing 

 

SR&ED financing is a vital component in the ecosystem of Canadian business innovation.  Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with the intricacies of SR&ED financing, empowering them to achieve their growth and innovation objectives.

 

Start your SR&ED financing journey with us today and unlock the potential of your business. Begin Your Journey

 

FAQ

 

 

What is SR&ED financing in Canada?

SR&ED financing refers to specific funding solutions that leverage tax credits from the Scientific Research and Experimental Development program, aiding Canadian businesses in supporting their research and development activities.







How does SR&ED financing benefit businesses?

It provides immediate cash flow, enabling companies to reinvest in R&D and operational activities, fostering continuous innovation and business growth.




Who is eligible for SR&ED financing?

Canadian businesses engaging in qualifying research and development activities can apply. Eligibility depends on meeting specific criteria set by the SR&ED program.




What types of projects qualify for SR&ED financing?

Projects that contribute to technological advancement, resolve scientific uncertainties, and involve systematic investigation are typically eligible for SR&ED financing.



How does one apply for SR&ED financing?

Applying involves documenting eligible R&D activities, submitting a claim for SR&ED tax credits, and seeking financing based on anticipated or approved credits.






Can startups access SR&ED financing?

Yes, startups who are Canadian controlled private corporations engaged in qualifying R&D scientific research activities around scientific or technological uncertainty can access SR&ED financing, provided they meet the program's criteria.






Are there risks involved in SR&ED financing?

As with any financing, risks can include the variability of credit approval and the potential of not fully capitalizing on the credit if not well-managed.



How long does it take to receive SR&ED financing?

The timeline varies, depending on the processing of the SR&ED claim and the specifics of the financing agreement.



Can SR&ED financing be combined with other funding?

SR&ED financing can often be integrated with other forms of business funding, enhancing overall financial strategy.



Is there a maximum amount for SR&ED financing?

The maximum financing amount for sr ed tax credits typically depends on the size of the SR&ED claim and the specific terms set by the financier.

Does the industry of a business affect SR&ED financing eligibility?

No, the industry is not a primary factor in a sr ed refund claim. Eligibility is based on the nature of the R&D activities around scientific or technological advancement rather than the industry.



Are there specific expenses that qualify for SR&ED financing?

Eligible expenses typically include salaries, materials, overhead, and contract costs directly related to eligible expenditures around R&D activities.



Can SR&ED financing impact a company’s tax situation?

Yes, it affects tax planning since SR&ED tax credits can alter a company’s tax liability and income tax payable, making strategic financial planning essential.




 

SR&ED Tax Credit Financing : Your Cash Flow & SRED Loan 'How To' Primer

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YOUR COMPANY IS LOOKING FOR CANADIAN SR&ED TAX CREDIT FINANCING! 

Revolutionizing Cash Flow with SR&ED Loans: A Game Changer for Canadian Companies

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 

 

From Tax Credits to Immediate Cash: The Magic of SR&ED Loans

 

 

SR&ED tax credit financing allows owners/financial managers to fully explore the cash flow potential of Canada's SRED program. 

 

SRED financing is a financing process that allows a business to access the cash for their sr&ed tax credits before the government refund arrives, which in many cases can take many months - That whole process goes by several names - ie sr&ed financing, sr&ed loans, and even sr&ed factoring as your claim is, in effect, a government receivable. Let's dig in

 

INTRODUCTION

 

Canada's Scientific Research and Experimental Development (SR&ED) program has been a benefit for thousands of companies every year as these companies take advantage of the sr&ed federal tax incentive program - It is of course the Canadian government's way of encouraging businesses in Canada to work on research and development (R&D) projects within Canada.

 

The challenge within the program is that businesses face a cash flow challenge as they spend on r&d and then wait to receive their tax refunds due to government delays around claim approval, a potential claim audit, and review, etc - Naturally PSAC CRA strikes never help also!

So the Sred loan process changes that cash conundrum into a solid financial tool that solves the cash flow challenge around research and development.

 

WHAT IS THE SR&ED LOAN  AND HOW DOES THE SRED FINANCING PROCESS WORK?

 

SR&ED loans are a  truly innovative financing solution that allows a business to beat the slow release of refundable tax credit refunds by the government - aka    Canada Revenue Agency (CRA).

 

So how difficult is it to finance your SRED claim?  It involves a very typical business financing application, as well as a full backup for your SRED claim, including who prepared it, details of any previous year's submissions and approvals, etc.

 

 

The actual sr&ed loan process could not be easier - A  simple application process around the company information, as well as information on your actual sr&ed claim, is all that is required.  The vast majority of companies in Canada hire' sr&ed consultants' to write and prepare their claims.  Knowing your claim is prepared by an experienced and credible sred consultant simply enhances both approvals of your claim by CRA, as well as the same time enhancing its ability to be

financed.

A company can choose various financing options around funding sred claims - they include funding claims before they are filed, financing filed claims on a one-time basis, or arranging for timely disbursements depending on cash flow needs,

 

KEY POINT - The collateral for the claim is the actual refund itself, no payments are made during the loan period - and claims are typically financed at 75% of the claim amount - Companies receive the final 25%, less accrued financing costs when the claim refund is paid by the government.

 

Talk to 7 Park Avenue Financial on how you can receive the lowest financing rates in Canada for your sred refund.

 

Whether your business is a first-time, or multiyear claimant everyone is in the same boat - waiting for the refund cheque. Occasional audits of either your technical claim or the financial aspect of the claim can further prolong your receipt of funds.

 

In talking to many clients we can safely say that most firms who have a commitment to R&D capital probably could put those funds to alternative uses.

 

 

BENEFITS AND USES OF SRED LOAN FINANCING 

 

The uses of SR&ED loans go well beyond basic cash flow needs - In the majority of cases, it allows businesses to fast-track and complete their research and development - thereby enhancing the valuation of the company which is so critical in the early stages of a business.

 

Opportunities that arise in the interim can be taken advantage of, and business owners love the fact that sr&ed finance is non-dilutive in nature - that has a great appeal to the entrepreneur attempting to build value and maintain ownership.

 

Simple concepts such as hiring additional technical staff can add to larger claims and greater business success.

 

 

Bridging the Gap: How SR&ED Loans Are Driving Canadian R&D Forward 

 

 

Clients we meet use SR&ED refunds for working capital, buying new equipment, reducing payables, and of course also furthering their R&D enhancements. In essence, you're enhancing and continuing to expand your business.

 

Therefore as powerful a tool, as an SRED claim is, the reality is that it itself can create short-term cash flow problems. Those challenges are on top of the ones Canadian business owners and financial managers face every day, slow receivables, demanding payables, opportunities to purchase more inventory, or in some cases invest in equipment and long-term fixed assets.

 

How then does monetizing your SR&ED claim address your overall working capital and cash flow position?  Simply that you can monetize your claim as soon as you file it, or even while you're preparing the claim. That's called an SR&ED accrual or SRED credit line facility.

 

SRED, aka SR&ED tax credits, are financeable! So your ability to finance your claim simply allows you to receive approximately 75% of your claim today in the form of an SRED bridge loan. And remember, that's not additional debt on your balance sheet, since the SRED loan is in fact offset or collateralized by the full value of your actual SRED refund. 

 

Talk about kick-starting cash flow - you're receiving cash for non-repayable refundable tax credits under the program.

 

Even if your firm is experiencing financial challenges you are still very much in the position of being able to discount, or in effect factor your SRED claim, because that is the asset that supports the financing. Many firms that look to SRED Loans for cash flow are also start-ups in many cases, or at a minimum, early-stage firms - in all industries.

 

An SRED cash flow loan can be completed in a week or two assuming your full ability to provide backup on the claim, info on your firm, etc. It's a very basic process.

 

CONCLUSION - THE SR&ED LOAN BENEFIT

 

SR&ED loans are a solid solution for any business in Canada focusing on r&d and wishing to address the cash flow challenges that come with that investment - SRED loans bridge that critical gap between executing your r&d project and waiting for your tax credit refund - Whether your company is established, or a startup let sted tax credit financing alleviate cash flow pressures around the large amount of r&d you are spending. These short-term bridge loans bring no long-term debt to the balance sheet and come at competitive financing costs much less than other financing solutions such as long-term longs or short-term high-interest working capital loans.

 

Call 7 Park Avenue Financial,  a trusted, credible, and experienced SRED finance expert who will no doubt help them accelerate the financing of sr ed credits for cash management - ending the waiting game!

 

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

 

 What is the sr&ed loan process? 

 

The sr&ed loan process involves the company detailing basic claim preparation on  r&d activities on the research project - That process, often via an sr ed consultant, includes technical reports and summaries,  as well as supporting documentation on eligible expenditures around the technological innovation in the project.  The sred loan application is a basic loan application based on the collateral of the sred refund itself and comes with competitive rates compared to many forms of financing.

After basic due diligence around the company and the claim which typically takes a few days, a term sheet is provided to the borrower.  Loans are typically in the 75% range of claim or accrued sred work values and the loan is collapsed and repaid in full to the commercial lender/ financial institution  when the sred refund arrives - Businesses can also take advantage of advance funding for claims  for their financing needs, prior to filing  the formal claim at  financial year end with their corporate tax return

 

What is the Sr&ed Program? 

The Scientific Research and Experimental Development (SR&ED) program is a Canadian tax incentive program for Canadian firms that is designed to encourage businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada. These tax incentives come in three forms: an income tax deduction, an investment tax credit (ITC), and, in some cases, a sr ed refund.

 

 

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Your Most Complete Guide to SR&ED Financing & SR&ED Loan Success In Canada

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SR&ED refundable tax credits and financing r&d   are in the news a lot these days. Things seem to be always changing, sometimes in a big way, sometimes less. The one constant? SR&ED Financing! It's always there - always available. Let's dig in.

 What is The SRED CREDIT?

 

Sometimes called ' Shred  Credits ' they are one of Canada's most accessible, popular, and widely used incentive programs under the auspices of Canada Revenue Agency, allowing you to claim for either a cash grant or in some cases a deduction against income taxes owing. R&D capital investments use up cash flow resources, so collateralizing your sr&ed claim makes a lot of sense when other traditional  sources of financing are not available.

Corporations that are in need of liquidity cannot afford to wait until the end of the fiscal year to receive payment of refundable tax credits. For this reason, lenders offer sred funding, an advance (or loan) to eligible corporations, while using the future receipt of the SR&ED refundable tax credits as collateral.

 

In the majority of cases, you are eligible for amounts in the 35-40% range of your total expenditures. The amount of that refund can go over 5O% when your Sred Consultant and accountant, typically working in combination, take advantage of both the federal and provincial parts of the program. 

 

At 7 Park Avenue Financial we can't overemphasize the role of ensuring your have an experienced and reputable sr&ed consultant preparing your claim . Their track records and reputations are invaluable both in the financing process as well as the CRA audit process for sred.

The formal name of the program is ' Scientific Research and Experimental Development ' , hence ' SR&ED ' ! It is one of the most popular government programs vie encouraging firms to conduct r&d in Canada, as well as providing refundable tax credits for those investments made by your firm.

 

Why a Sred  Loan ? SR&ED Debt Finance

 

 

Simply because its a method of allowing you to use your refund owing, which is essentially an account receivable, as a source of operating cash in the same manner in which any company would finance their receivables via either a bank or a commercial a/r financing firm. It's a good example of  ' specialty financing '. Note that this does not involve government grants, or grant financing - that's a whole different category of accessing funding from the government.

 Essentially you are unlocking the value of your tax credit, which is, in fact, a real asset on your balance sheet, although many companies we have worked with sometimes do not book that as a receivable. 

 

Companies using the Sred program tend to always be looking for business growth capital. Most but not all are early stage companies looking to commercialize their products and services. Just the ability to finance their r&d prior to their claim filing is appealing to firms who are always looking to generate cash. Many firms are in new or emerging sectors such as digital medial , environment, biotech, etc but firms in every industry utilize SR&ED. Accessing traditional financing is very challenging for many of the firms involved in SRED, and going the equity raise route is both time consuming and even moreso, costly!

 

 Claimants under the program may be surprised to know that if your firm has ongoing multi-year activity in research you can set up a Sred Line Of Credit, allowing you to accrue and then finance ongoing work. Here is where a track record in' Shred ', as well as a good consultant, is important.  Also, your claim can be financed before filing with the proper level of due diligence around claim content.

 

 

 We can make the case that SR&ED finance is really  SRED factoring, namely the factoring of your sred receivable. And as we have mentioned elsewhere, owners should consider sred accrual financing allowing you to accelerate cash flow.

The challenge around receivables of course is ' waiting for payment '! Historically the timing around SRED REFUNDS has been a major point of discussion and is one of the reasons why a  SR&ED FINANCING COMPANY is often utilized to monetize your tax credit. Depending on the size of your claim, the technical aspects around it a firm can easily wait for  many months to receive their refund.

 

 

 Another issue around the timing of claims is that your claim is filed by your accountant and Sr&ed consultant, typically working together, at the time of your year-end tax filing. You can see that it could add a further delay to payment by the government to your firm. 

 

 

KEY POINT: A  SRED CLAIM  can often be financed and funded in just a few weeks if you are working with expert help and someone who has a track record of financing success in the tax credit area.

 

Although many business people use the term ' loan ' when it comes to this type of debt facility,  SR&ED financing brings no debt to the balance sheet, you are just monetizing your claim as a manner of advanced funding.

 Utilizing SRED TAX CREDITS is simply an additional source of funding for many companies, many of which are new, emerging, and even startups. Although many firms are technology companies almost every industry is eligible for SRED CREDITS based on their commitment to r&d.  It's all about growing their business.

 

 New clients at 7 Park Avenue Financial always want to know if they are in fact eligible for SRED CREDITS.  If your business is what is known as  CCPC,  essentially meaning a private, not public company and you are doing qualified experimental research to develop your products you are eligible.

 

Industry statistics around SR&ED tell us that in the last 7 years payouts on SR&ED claims have reduced by over 5 Billion dollars - suffice to say billions are still being paid on thousands of current claims. The government seems to be asking anyone with interest to provide guidance on the future of the program.  Canada Revenue Agency provides great information on the CRA website on both the qualifications around your claim and overall eligibility. 

 

All of that  information essentially comes down to 3 issues - Is your firm investing in r&d capital to advance technologically, are their uncertainties in your research, and has the research become a process whereby technical challenges are overcome

Talk about uncertainty! Business owners hate uncertainty. Who doesn’t? The one constant in SRED? Cash Flowing Your Claim!


SR & ED (SR ED) factoring is a viable consideration for any Canadian company that files SR ED claims and is looking for additional working capital. Not all Canadian business owners and financial managers are aware that SR ED claims can be monetized (financed!).


For an overview of SR ED financing, it’s important for us to validate some of the basics -


-Have you filed an SR ED CLAIM?


-How much was the dollar amount of the claim?


-Who prepared the claim?


-What amount of cash or working capital do you need in conjunction with the claim filed?


If you are looking for cash flow with respect to your Canadian SR ED claim you either have working capital financing in place now with your bank or finance firm (a factoring company perhaps) or your firm is self-financing and you are looking for the SR ED to supplement additional cash flow. Risk capital /equity capital and Canadian venture capital is challenging to raise in Canada . Financing r&d makes a lot of sense.


Canadian business owners and financial managers are aware that when they finance their receivables and inventory these 'current assets' are 'margined'. By margining we of course mean the amount of funds you can borrow against these assets.


In SR ED financing you are generally financed 70% of your claim, and that is the combined total of the Federal and Provincial claim.


So if you have filed an SR ED claim, of say, for example, $350,000.00 you are eligible for 70% of that amount, or $245,000.00


Funds can be advanced as soon as you have filed the claim, but not before. Naturally, it is somewhat important to ensure your claim was filed by a qualified party - usually an accounting firm or consultant. It's these consultants that are in the field daily on the program, wresting with all sorts of changes around Form 4088! ... Defining and backing up your project.


SR ED financing is outside your normal current financing arrangements. The SR ED is collateralized separately - it is, in essence, a short term working capital loan that is repaid when the government sends you your cheque. Most Canadian business owners do not want to wait, 3, 6, 12 months or more for a cheque for a substantial amount that is in effect a non-repayable grant from the government. The Canadian government continues to pour well in excess of a billion dollars into the program, and if your firm qualifies for an SR ED claim -


1. Why wouldn’t you use the program?

2. Why wouldn’t you accelerate the cash flow from the grant by financing your SR ED claim?


SR ED financing is a boutique small industry in Canada - business owners are cautioned to work with a qualified, credible, and experience party who will ensure they are maximizing financing capabilities under the program. Naturally, any firm can wait for its refund , but using the cash from financing your claim allows you to move on to new opportunities in your business, including even more investments in r&d. 

 

Typically companies investing in research are in highly competitive industries, and rather than considering external equity this type of financing is simply one way of increasing value and time to market without the dilution of additional ownership to your company. Utilizing internal cash resources in the early stage of growth allows you to increase the value of your firm at a later point.

Companies financing their r&d claims use funds for a variety of reasons - that might include further research, general working capital purposes, marketing, new employee hires, or geographical expansion.

 

How Does The SR&ED Financing Application Process Work

 

 Business owners and their financial mgr's should view the financing process as the most simple of loan applications. A minimum amount of the claim is typically $100,000.00. With a client's full cooperation we have had clients financing in plays in a week or two, sometimes sooner. Typical loan amounts are in the 70% range based on your total claim. Simple business application information applies, ie years in business, articles of incorporation, etc,

No payments are made for the duration of the financing! The loan interest accrues and is deducted from the final payment by the government of your claim . Your current lender security stays in place, and significantly less emphasis is paid to typical bank focus on personal guarantees, net worth of principals, etc. A track record in previous SR&ED claims is helpful, but not necessary, and firm time claimants may apply to fund their claims.

It should not come as a surprise that certain other refundable tax credit programs can also be financed, they include:

 

 

Digital Multimedia Tax Credits

E-Business Development

Multimedia Gaming

Film Tax Credits in Many Canadian Provinces

In summary, Canadian firms that are eligible to file an SR ED claim should do so. What firm would not want to receive a cash non-repayable cheque from Ottawa! If you can wait for the funding, and don’t need additional cash flow, great. That's why sred tax credit loans make sense.

 

If you wish to arrange interim financing for your claim enlist the services of a trusted and credible SR ED financier. In a matter of a couple of weeks, your working capital and cash flow will be augmented vis a vis your SR ED financing. SR ED Financing and factoring - a great Canadian alternative financing strategy

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

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 financing 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
7 Park Avenue Financial/Copyright/2020

A SR&ED Bridge Loan : Never Thought Financing Your SRED Tax Credit Claim In Canada Possible? Here’s How .

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See How Easily Your SRED ( SR&ED) Claim Can Be Financed

Information on SR&ED financing in Canada. A SR&ED bridge loan for your refundable tax credit claim can be monetized for immediate cash flow and working capital

SRED. aka ' SR&ED'. The dust seems to have finally settled on the SRED Tax credit claim program in Canada. To put it mildly it was a ‘winter of discontent ‘by all parties.


That means a couple of things of course, one of which is that it's ( more or less ) back to business as usual for the thousands of Canadian firms who utilize the SR&ED refundable tax credit program ; it also means that if you haven’t previously then you can also finance that claim . If only for one reason - immediate cash flow!


Sred financing , and yes , even the SRED program itself seemed to quietly slow down last year as the federal government took a hard look at the program . That same program was a critical part of the financing of thousands of firms in Canada who strive for innovation in their products and services.


And that’s everything, by the way, from start to up major established corporations. In fact only 20% of the users of the program were larger corporations , so we can only imagine the rumblings in ' SR&ED land ' for the 80% of firms who find themselves in either start up or early revenue mode, or perhaps they have just been in business a few years and are starting to ' ramp up ' in revenues.


While confusion seemed to reign supreme in ' SRED ' the reality is that the program took a hard hit in popularity as everyone with a vested interest made a hard stand on where they stood on the program . That included the government, of course, the SR&ED consultants that actually prepare you claim (most firms don't prepare their own claims “and industry economists and pundits who questioned the payback on the governments billions of dollars spent on these non repayable tax credits.


And for the firms who in fact finance their claims for cash flow and working capital via a SRED financing bridge loan for their claim in Canada that cash looked like it might be going away.


Nothing likes a happy ending, and there seems to be a general status quo on the program, although some changes were made to areas such as the ' CAPEX ' portion of the program.


All's well that ends well, we guess, so it’s back to ensuring that if you wish to finance your claim and accelerate working capital benefits that choice is all yours .


Claims are generally financed at 70% loan to value, and a properly structured SRED financing typically takes the form of a bridge loan collateralized by your claim. No payments are made for the duration of the loan, and your firm receives the balance of your claim, less financing costs once the good folks in Ottawa and your respective province approve and fund your claim per their guidelines.


Speak to a trusted, credible and experienced Canadian business financing advisor on a bridge loan for your SR&ED tax credit today.


P.S. Claims can also be financed today for your next years spend. Don't forget to look into that benefit also.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

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

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

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 financing 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 red.



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

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

SRED Loans for Cash and Working Capital Now

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SR&ED Productivity Enhancement ? It's Called SR&ED Financing !!

Information on SR&ED Financing in Canada . The ability to monetize/cash flow your sred claim accelerates working capital and cash flow

SRED financing is simply the method by which you can, our firms own option, monetize or ‘cash flow ‘ you Sr&Ed tax credit and generate needed working capital and cash flow for ongoing operations or of course further investment in your r&d processes and development .

We have all seen the oil change commercial where the mechanic states ‘you can pay me now or pay me later ‘. Well financing your sred 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 – that could take anywhere from 1-12 months – Or you can arrange to finance that claim now and utilize those funds for any business purpose .

Are we eligible to finance our sr&Ed claim? Clients often ask. We can only replay that if you have a claim, and have filed it, your are in fact eligible. In fact, under certain circumstance it can be arranged to receive funds even prior to filing.

Clearly the pure 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.

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.

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 a sred loan – is there additional debt involved

How long does it take and what does it cost?


Let’s cover off 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 you sred claim is simply a business financing that uses the actual sred claim as collateral. You receive approximately 70% of the full federal and provincial total as a short term cash loan that is collateralized by the sred itself. Of course the additional 30% is still yours, it is simply held back as a buffer for any adjustments that are made to your claim.

No payments are made on your sred loan, and the final cheque to you 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 for which most Canadian business owners are not even aware.

The typical process to create a 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.

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 a credible , experienced and trusted business financing advisor in this area .

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

SR & ED (SR ED) Financing / Factoring In Canada

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Sr&ed Program - Going Going ..Who Knows : SR&ED Financing - Here!

OVERVIEfW – Information on the financing of refundable tax credits in Canada. The SR&ED program provides valuable capital to businesses investing in r&d capital programs - SR ED Bridge loans make sense - here is why !

SR&ED refundable tax credits are in the news a lot these days. Things seem to be always changing, sometimes in a big way, sometimes less. The one constant? SR&ED Financing ! It's always there - always available. Let's dig in.

Top experts tell us that in the last 7 years payouts on SR&ED claims have reduced by over 5 Billion dollars - suffice to say billions are still being paid on thousands of current claims. The gov't seems to be asking anyone with interest to provide guidance on the future of the program.


Business owners hate uncertainty. Who doesn’t? The one constant in SRED? Cash Flowing Your Claim!

SR & ED (SR ED) factoring is a viable consideration for any Canadian company that files SR ED claims and is looking for additional working capital. Not all Canadian business owners and financial managers are aware that SR ED claims can be monetized (financed!).

For an overview of SR ED financing it’s important for us to validate some of the basics -

- Have you filed a SR ED CLAIM?

- How much was the dollar amount of the claim

- Who prepared the claim?

- What amount of cash or working capital do you need in conjunction with the claim filed?

If you are looking for cash flow with respect to your Canadian SR ED claim you either have working capital financing in place now with your bank or finance firm (a factoring company perhaps) or your firm is self financing and you are looking for the SR ED to supplement additional cash flow.

Canadian business owners and financial managers are aware that when they finance their receivables and inventory these ' current assets ' are' margined ‘. By margining we of course mean the amount of funds you can borrow against these assets.

In SR ED financing you are generally financed 70% of your claim, and that is the combined total of the Federal and Provincial claim.

So if you have filed a SR ED claim, of say, for example, $ 350.000.oo you are eligible for 70% of that amount, or 245,000.00

Funds can be advanced as soon as you have filed the claim, but not before. Naturally it is somewhat important to ensure your claim was filed by a qualified party - usually an accounting firm or consultant. It's these consultants that are in the field daily on the program, wresting with all sorts of changes around Form 4088! ... Defining and backing up your project.

SR ED financing is outside your normal current financing arrangements. The SR ED is collateralized separately - it is in essence a short term working capital loan that is repaid when the government sends you your chq, Most Canadian business owners do not want to wait, 3, 6, 12 months of more for a cheque for a substantial amount that is in effect a non repayable grant from the government. The Canadian government continues to pour well in excess of a billion dollars into the program, and if your firm qualifies for a SR ED claim -

1. Why wouldn’t you use the program?

2. Why wouldn’t you accelerate the cash flow from the grant by financing your SR ED claim?

SR ED financing is a boutique small industry in Canada - business owners are cautioned to work with a qualified, credible, and experience party who will ensure they are maximizing financing capabilities under the program.

In summary, Canadian firms who are eligible to file a SR ED claim. should do so. What firm would not want to receive a cash non repayable cheque from Ottawa! If you can wait for the funding, and don’t need additional cash flow, great, if you wish to arrange interim financing for your claim enlist the services of a trusted and credible SR ED financier. In a matter of a couple of weeks your working capital and cash flow will be augmented vis a vis your SR ED financing. SR ED Financing and factoring - a great Canadian alternative financing strategy.


7 Park Avenue Financial :

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .







7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop