SR&ED Financing In Canada : Benefiting From The ABC's Of the SRED Loan Process

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You Didn't Know Your SR&ED Refund Claim Can Be Financed ? Now you Do!

Information on SR&ED financing in Canada . The ability to monetize your refundable tax credit refund is a mechanism to accelerate the cash flow your company requires to run and grow your business. A SRED Loan works - here's why and how

Not all Canadian business owners and financial managers are aware of one of the greatest government programs still currently in existence at both the federal and provincial level. The formal name for the program is Scientific Research and Experimental Development program. Most people call it simply the SRED (SR &ED) program; we have also heard many people pronounce it as 'SHRED 'also!

We put Canadian businesses into two categories when we discuss the program - those that don't know about the program period, and those that know about the program but are not aware that their claims can be financed.
SR ED financing is an excellent source of short term cash flow, and allows a company to reap the benefits, in cash of funds that they have put into R&D.

It is probably useful to do a short overview - let's call it a SR ED primer!

The program is administered at the federal and provincial levels of the Canadian government. It is very important to note that the SR ED grant (yes it's non-repayable) is for Canadian private firms only - it does not apply to public corporations the program is applicable literally to almost every type of firm and industry in Canada. A company files it's claim at the same time it files it's year end tax return.

In our experience the majority, we feel almost 95%+ of claims are prepared by an independent third party. They have expertise, credibility, and have a strong knowledge of the program and the government requirements. We would further point out that if a claim is not prepared by a qualified third party then there may be an issue in financing the claim - not always, but sometimes.

Claims can be expensive to process and prepare, and in general the industry has evolved into two types of costs associated with the claim. What are those two cost scenarios?

1. Customer pays a third party in full for time and preparation involved in the claim. The customer reaps the full benefits of the claim when it is processed

2. Customer signs an agreement on a contingency basis, and pays the preparer of the SR ED a portion of the claim when it is approved - bottom line he has no cash outlay and the SR ED consultant is at risk re time and preparation involved in the claim.

Let's now focus on financing of the claim. The financing of the claim is somewhat of a boutique industry in Canada, and requires specialized knowledge around the quality and collateralization of the claim. The Canadian banks, as a rule, with only minor exceptions, do not make SR ED loans.

Claims are financed at approximated 70% of loan to value. What do we mean by that? We mean that loans on SR ED are made to 70% of their combined federal and provincial amount. Example - Customer files a claim for $ 300.000.00. The SR ED loan would be for 70% of that amount: = $210,000.00.

Claims can be financed relatively quickly when working with a qualified financing expert in this area. It certainly is possible to complete a transaction in a couple of weeks, from initial discussions.
Naturally some level of due diligence is required on the firm, and we point out that many firms are in fact total start ups and are filing their claim for the first time. An additional financing note is that first time claims are scrutinized more closely as the customer at that point does not have a track record in this area. Track records help the financing.


In a future article we will discuss further relevant aspects of SR ED financing. Our key take away points here are that the SR ED program is a very viable program and source of cash for Canadian business. Claims can be financed, and are a valuable source of working capital for many Canadian firms.


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

Tax Credit Financing In Canada : Maximized

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Information on tax credit financing in Canada. The ability to finance SR&ED and film and digital tax credits is a cash flow acceleration tool

Tax Credit Financing in Canada is a great alternative financing solution for Canadian firms who wish to maximize their Government tax credits. These tax credits typically arise out of the SR &ED (Scientific Research & Experimental Development) program, (commonly called SR ED) as well as various film tax credit programs that are Canadian based.



When you finance a tax credit such as SR ED you are in effect generating cash flow and working capital for your company and of course recovering monies that have already been spent! As most business owners pleasantly discover when they determine they are eligible for SR ED or film tax credits, these funds are non repayable, in effect they are grants .



The acronyms for these programs are SR & ED, FTC, and OIDMTC.



Customers that we work with typically generate financings through us after they have filed their claims. With respect to the SR &ED financings these claims are filed at the same time you file your corporate tax returns. Typically we can generate and successfully complete these financings within 14 days, sometimes it takes longer due to the complexity of the claim and other financial issues your company might be facing. It is critical there are no CRA tax arrears; otherwise your claim will be offset against the arrears. In cases where the tax arrears exist, and are smaller than your claim, we can arrange to pay Ottawa and provide you with the full financing benefits of whets left in your claim.



Canadian business owners and financial managers typically use these funds for short term working capital purposes.



In some instances, particularly in the film tax credit financing area your project can receive funds under the film tax credit financing prior to filing the final claim, provided your project can confirm eligibility. In these instances it is recommended that you can successfully prove you have filed and been approved successfully in previous years.



In cases where your corporate SR & ED claim is a first time claim there is a bit more due diligence put into the quality of the claim and your overall financial position, but categorically these claims can be filed and financing originated on a first time claim. Most companies use the services of well known SR &ED preparers, which accentuate the positive nature of your claim.



With respect to SR &ED claims that are financed, typical financing is generated at 70% loan to value. That of course simply means that you receive, on financing approval, approximately 70% of the total provincial and federal claim as working capital. These funds are repaid in entirety when you claim is adjudicated, approval, and funded by the government, so you are not paying ‘ monthly payments ‘ – you simply receive the working capital injection which is offset on final approval .



Canadian companies who are interested in tax credit financing and film credit financing should speak to an experienced advisor in this area who can assist them in the financing of the claim. It’s a great Canadian alternative financing strategy!



Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 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 :
http://www.7parkavenuefinancial.com


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

Sred Financing In Canada : The Power Of Sr&ed Loans

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SR&ED Financing Loans In Canada : It’s Not Brain Surgery!

OVERVIEW – Information on financing SR&ED claims in Canada . SR ED loans monetize your refund quickly and efficiently and allow business owners the luxury of not having to wait for their refund / cash

SRED Financing in Canada, eliminates, in simple terms, the waiting for that refundable tax credit chq, We couldn’t count the worries or challenges you have around your competition in Canadian business.


One way in which Canadian business stays ahead of the challenge is via the Canada SRED grant program. Sred claims deliver billions, (that's not a typo - it really is billions) of dollars of non repayable grant funds to firms such as yours. Let's dig in.


How do SR&ED loans assist your firm to stay even more competitive? We tell clients that's because it accelerates the cash flow and working capital that your firm has coming from its R&D claim. Your ability to ' unlock ' sred funds is simply a cash flow accelerator. Clients often ask what the required uses for those funds are if in fact you do choose to finance your sred claim.


What do business owners & financial mgrs utilize the R&D capital refund for? The reality is that the funds can be used for any general corporate purpose - so that includes of course general working capital and cash flow, the purchase or down payment of additional new equipment and technology, or, at its most basic, retirement of short term or long term debt on your balance sheet . Even better? Investing in next year’s research to stay ahead of those competitors!

Your ability to quantify and demonstrate your business processes and advancements can result in hundreds of thousands of dollars of non repayable sred funds under the combined federal and provincial program. Those SR ED consultants that typically prepare claims are experts in that - they prepare the vast majority of claims in Canada.

There isn't a business owner in Canada today, certainly that we have met, that doesn't have some issues and problems with the role of government in business. Want a method of striking back?! Take advantage of sred and sred financing. Sred claims under Canada sred legislation are your encouragement to recover 30-40%, even more in your funds spent in the previous fiscal year.


We advise clients that the process around the financed of a sr&ed claim is much defined. In fact in the current business environment, based on some new rules for claimants, it’s even more defined.


Claims are most successfully financed when they are generated by a proper party - our aforementioned SR ED consultants. Their proven ability to craft and present a claim under new guidelines from the government is key to being able to maximize your claim.
Maximizing you claim maximizes financing, simply because under sred financing a typical advance is 70% of your claim, so the size of your overall total claim determines the financed amount, as in our example of the typical 70%.


It's common knowledge in the SRED industry that a huge majority of companies eligible to claim a sred grant don't do it. We have heard all the excuses, and we won't weigh in on them now, but they typically include - - ' we haven't heard of the program .... Is there an audit involved ... isn't expensive to prepare a claim, we don't have enough time, '''... etc, etc! We would rather preach to the converted.


So if you are filing sred Canada claims and want to accelerate cash flow immediately then consider monetizing your claim. It's a very basic process, via an application, providing back up on you sred, and being agreeable to collateralizing the claim via a basic documented process.


Seek out and speak to a SR&ED tax financing expert to ensure you can easily and effectively enjoy the benefits of sred financing via a cash flow and working capital financing of the claim.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 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 :

http://www.7parkavenuefinancial.com


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

Tax Credit Financing In Canada: Refundable Tax Credit SR&ED Loans & SRED Funding Delivers On The Cash Promise

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Can SR&ED Tax Credit Financing Make Your R&D Journey Happier ?

We Think So And Here's Why

Information on tax credit financing in Canada. SR&ED loans can play a valuable part in refundable tax credit finance . Here's information on why businesses committed to R&D Capital Investment should consider SRED Funding

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.

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 –
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 :

http://www.7parkavenuefinancial.com


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

Are There Government Grants and Loans For Canadian Businesses?

How To Address Gov't Grants & Loans .. Seriously

Information on government grants and business loans in Canada . What programs deliver on funding for your business? Answer = Gov't Guaranteed Loan and SR&ED!

I am often asked by customers if there are grants and loans available for their business in Canada. On many occasions these firms are either a start up or pre-revenue. There is a general belief that there is 'free money' out there, and people are trying to find it! I categorically believe there is no free money available - if that was the case can you just imagine?!

However, there are some excellent programs, two in particular, that in our opinion are the two best government programs for Canadian business in the SMALL MEDIUM ENTERPRISE ' SME' sector.

The Canadian government has allocated hundreds of millions of dollars into what is known as the CSBF Loan program. The government provides a lot of data at its website around the availability of the program, how it works, and who is eligible.

While some of the information might seem overwhelming there is a lot of assistance available. For the purposes of this article we will share that the program is available to all new or established firms with revenues under five Million dollars. We note also that the program does not apply to publicly listed companies.

Most people that are familiar with the program might not know that in the current 2009 world economic crisis the government increased the amount of these loans to $ 350,000.00 and in some cases $ 500,000.00. NOTE - The program was recently increased to 1,000,000.00$ !

How can you qualify for the program, and, more importantly, do you qualify?

Customers need to review the classes of assets that can be financed. The true power of the program is that the rates are only 3% over prime, currently in the 5% range. Terms of repayment are 5-10 years, and, are you ready, 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 estate with limited guarantees and great rates and terms? We don't think so!

If business principals feel they are adequately prepared to source out this programs financing power we strongly recommend that they begin this process. However, not everyone has the time, financial skills or accumen, and the ability or comfort level to complete this financing.

Those people should seek out the aid of a trusted advisor and business financing expert in order to maximize their participation in the program.

Let's get back to free money! Does it exist? Again, not really. But would you like to receive a check from the government for any processes, research or innovation that your firm has developed? If so you want to maximize your participation in the governments SR ED tax credit program.


Stan Prokop - founder of 7 Park Avenue Financial –

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 :
http://www.7parkavenuefinancial.com


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




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