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.

 

 

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

Revolutionary Tax Credit Financing Options You Need To Know About / Unlocking The Potential Of SR ED Loan Financing

 

YOU ARE  LOOKING FOR CANADIAN  SR&ED TAX CREDIT FINANCING! 

SR&ED TAX CREDIT FINANCING - YOUR ULTIMATE GUIDE

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

 

 

 

THE SECRET  TO MAXIMIZING SR&ED TAX CREDITS?   FINANCING !!

 

"Development is taking the research and turning it into something useful." - H. Dean Kamen

 

  

WHAT IS SR&ED TAX CREDIT FINANCING  

 

SR&ED (SRED) tax credit financing is a solid strategy used by more and more Canadian business owners and financial managers who wish to accelerate the benefits of Canada’s SR ED program.  Let's dig in on sr&ed tax credit financing options -

 

 Cash flowing, monetizing, or factoring via sred tax credit funding (they all mean the same thing!) your Canadian SR ED claim can accelerate cash flow and working capital for your privately controlled Canadian business that is utilizing SR ED credits under the government's program.

 

"Without financial resources, innovation remains a hobby." - John Doerr

 

In many ways the financing of your SR ED credit actually allows you to maintain your competitive edge, as the combination of your non-repayable tax credit and the immediate financing of it are a ‘double whammy‘ in the face of your competitors who might not use this strategy.

 

 

 

  

  

TURN YOUR SR&ED TAX CREDIT INTO A SOLID SOURCE OF FUNDING FOR YOUR BUSINESS  

  

  

 

A banker we deal with recently told us that current industry statistics show that many companies who are in fact eligible for the SR ED credit aren’t even applying for it, let alone financing it. Therefore when your firm maximizes the total value of your claim and then generates instant cash flow on that claim you are clearly leading the pack in this regard. That's the benefit of sred tax incentive loans.

 

  

HOW CAN I USE SR&ED TAX CREDIT ADVANCES  TO GROW MY BUSINESS  

 

Many clients tell us that they utilize the SR ED funds that they finance to assist in acquiring new equipment that allows them to maintain a competitive edge in their markets. The reality is of course that funds via  SR&ED financing solutions can be used for any general corporate purpose, which might be things such as equipment acquisition, advertising and marketing, reduction in payables or debt, or of course continued investing of even additional research and development efforts.

 

  

HOW DOES SR&ED TAX CREDIT FINANCING WORK?  WHAT DOCUMENTATION IS REQUIRED FOR  THE SR&ED TAX CLAIM  

 

So what is the cash flow and working capital potential in your SR ED, and how do you unlock that potential under the tax credit financing process?

 

If you are already filing for SR ED credits you are no doubt working with the assistance of your client, or, alternatively, someone that is known as a SRED consultant. Having a solid resource in one or both of these parties allows you to maximize on your potential claim. 

 

What is the role of SR&ED Consultants ?  Firms hiring a sr&ed consultant to rely on these experts to hand paperwork and documentation around their project to both identify the project clearly to CRA, as well as document the maximum allowable amount under SR ED - Quality claims will also avoid sr&ed audits by CRA.

Companies complete CRA form T6661 which is the actual narrative around the project and the challenges faced by the business in the sr&ed project.

Once you have filed your claim we recommend that you consider immediately financing the claim. Naturally, you don’t have to do this, and can simply wait the 3-12 months that it might take Ottawa and your particular province to review the claim, adjudicate it, and process it for payment. But, as we state, why not consider financing the claim?

 

  

HOW DOES A  SRED TAX CREDIT LOAN WORK?  WHAT ARE MY SR&ED TAX CREDIT FINANCING OPTIONS?  

 

Clients ask us how the actual process works. It is quite simple really. Your claim is generally financed at 70% of the total value of the amount you and your accountant and consultant have claimed. You can receive cash immediately after it is filed.

 

In certain cases you can actually receive funds for the claim prior to financing – that whole process is called SRED accrual financing. Some of the basic criteria are simply that you must have filed a claim before, have a solid reputable party preparing it, and be prepared to demonstrate good records and accounting around those expenses you are intending to claim.

 

 WHAT ARE THE BENEFITS OF SR&ED TAX CREDIT FINANCING 

 

So how can we summarize in a ‘bottom line' manner? It's simply as follows – you should be filing SR ED claims if you are eligible. On filing you have the option of financing that claim, so you are bringing immediate cash flow and working capital to your firm on funds that are not repayable to the government.

 

Funds can be used for any company purpose, and proper utilization allows you to maintain a competitive advantage over your competitors. That’s using research as a cash flow generator – a solid financing strategy!

 

Financing sr&ed tax credits for startups is always possible, even if you are a first-time filer or pre-revenue/early stage.

 

 WHAT ARE THE INTEREST RATES AND REPAYMENT TERMS FOR  THE SR&ED TAX CREDIT LOAN 

 

Financing rates for Sred Loans are very competitive for this form of non-dilutive financing. No repayment is made during the term of the loan, and loan facilities are closed out when Canada Revenue Agency pays the refund - Loan advances can be made after the business files its claim, or, if the company chooses financing can be approved prior to filing, ensuring a continuous road to cash flow on the claim.

 

Financing your refundable tax credits allows a business performing r&d to generate cash flows which can help the company run on a day-to-day basis as well as grow - all while not having to access additional owner equity and dilute ownership at a critical growth stage in the company.

Businesses can finance claims when they are completed and filed, or a company can choose to fund as they accrue their work in their project .  Most financings are approved within a 2-week period from start to finish via a basic application and information on the company.

 

 

 

CONCLUSION - HELP AND EXPERTISE FOR YOUR REFUNDABLE  TAX CREDIT LOAN

 

Get the cash you need to grow your business with SR&ED tax credit loan solutions. Find out how a SRED loan can help your business thrive in the new economy! Talk to the 7 Park Avenue Financial ( tax credit financing experts )  team about SRED tax credit financing services to grow your cash flow needs via maximizing the benefits of sred funding/tax credit financing as well as other financing options for business to assist in cash flow and cash management in your business.

 

 

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

 

WHAT IS SR&ED

Canada's  Scientific Research and Experimental Development (SR&ED) Program provides investment tax credits via a refundable tax credit to Canadian businesses that focus on r&d.  Companies of all sizes from start-ups to large corporations, and even public companies access the program - Most firms focusing on SR&ED receive a tax refund, and thousands of Canadian businesses access over 3 Billion dollars annually.

 

 WHO IS ELIGIBLE FOR SR&ED TAX CREDIT FINANCING 

 

SR&ED Tax credit financing for SMEs is available for any Canadian-controlled private corporation to claims research and development under Canada's  Scientific Research and Experimental Development (SR&ED) investment tax credit - R&D performed by the business must be done with a focus on the advancement of scientific knowledge and for the purpose of achieving technological advancement in science and industry. Companies that are not private receive a non refundable tax credit to reduce income tax payable in the tax year- i.e. public companies who conduct research around scientific or technological uncertainty.

 

WHAT ARE SR&ED ELIGIBILITY CRITERIA

 

Businesses qualifying for a SR ED refund/tax incentives must be able to prove criteria around technological advancement, and technological uncertainty and be able to provide information around technical content and the processes the business undertook in the research and development.

Project documentation must demonstrate the employees involved in the research and the amount of time spent on the project. The largest portion of any sr&ed claim typically involves wages and payments to subcontractors.

 

Financing via cash advances for the sr&ed claim can be funded via third-party commercial finance companies who fund the tax credit claim either prior to the refund being claimed or after the business has filed its year-end financial statements and documented their evidence-based documentation for innovation the business has focused on in their research and development.

 

 WHAT AMOUNT OF EXPENDITURE CAN BE CLAIMED? 

The amount of eligible expenditures that can be claimed in SR&ED falls under the categories of eligible salaries and wages, payments to subcontractors on the sr&ed project and materials cost pertaining to the sr&ed work under the category expenditure limit. Canadian controlled private corporations, aka "  CCPC's) " claim for specific percentages of these expenditures under the sr&ed expenditures for credit calculation.

Supporting documentation around the qualified expenditures must be kept by the business around actual work completed, people involved in the work and the calculations done by the firm under CANADA REVENUE AGENCY /CRA guidelines.

 

Stan Prokop

SR&ED Tax CredIt Financing vs Waiting For Your Refund

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Information on SR&ED Tax Credit Finance Solutions In Canada

Sr&ed tax credit financing is an important method of raising cash - primarily for younger or higher growth firms who can utilize the capital . Claims can be financed for approx 70% of their filed value . The financing works more efficiently when the claim is prepared by a firm with a solid track record .

The formal name for the program is the Scientific Research and Experimental Development ,( hence 'SR & ED' ) program . The Canadian government allocations well over a Billion dollars to this program annually, and it can be a valuable source of financing for many firms, particularly those in early stage.

Claims are generally in the 35% + range for all r&d performed. and can include portions of a firms overhead costs! After filing a proper SR ED claim business owners can finance that claim with our assistance. 7 Park Avenue Financial encourages all its clients to file SR ED claims where applicable, and if financing those claims makes sense we will get the job done !


Many Canadian firms are not aware that they can finance their SR ED tax credit claims. Lets backtrack a little bit. The SR ED Tax credit program is a Canadian government program which allows Canadian privately controlled firms to recoup a very large amount of direct and indirect expenses related to their innovative business processes, research and development, and asset acquisition related to those very efforts.

Thousands of Canadian firms file such claims and the program has disbursed close to 2 Billion dollars annually to Canadian firms.

Funds received from the government, while taxable, are NOT repayable, we repeat, NOT repayable! Claims are generally prepared by one of two parties, either the firms accountants, or, more frequently, an independent SR ED preparation firm who are experienced in the writing of these claims, and have amassed expertise and bench strength in that customers particular industry. We note also there is a growing SRED industry around film and TV credits, digital media, and gaming.

We are continually amazed at the number of companies who are eligible for the program but in fact have never heard of the program. You can imagine the expression on the business owners faces when they are told they have been eligible for the program for years, and have in fact relinquished their rights to these funds.

As a technical matter companies can only claim funds for the last 2 years of r&d, business process development, etc. Furthermore the claims have to be file at the same time the firm files annual tax returns.

Let's get back to the financing of the claim!

The financing of the claims is in effect a temporary loan against the SR ED claim, allowing the company to monetize immediately the incoming cash flow related to the SR ED claim. One of the key factors around the financing of the claim is the size. Generally speaking it makes sense to finance claims that are in excess of $200,000.00.

However, realistically many smaller Canadian firms file claims significantly below that amount. While these claims are somewhat more difficult to finance it certainly can and does makes sense in many instances. Our firm has worked with many customers who view the claim as one of their most significant cash inflows during that year.

 Typically it takes between two - four weeks to arrange for a proper financing of the claim. Proper due diligence around the general financial health and prospects of the firm is done, and typical credit assessment is done around the lenders ability to properly secure the claim vis a vis a collateralized registration against the claim.

Loans against the claim are typically made at approximately 70% of the total of the combined federal and provincial claim. Why 70%? A safety buffer is in fact created in the event that the claim is adjudicated by the government and a portion of the claim is downsized or disallowed. We have noted that this happens when customers or their consultants file claims that are too aggressive. The customers mentality seems to be ' I will file a claim for $300,00.00, if they knock it back a bit I will still get more funds than originally intended '. In general this is probably not a good strategy.

Should You Finance Your SR&ED Claim ?

In summary:

* Companies should file claims if they are eligible * If cash flow and working capital is important the SR ED claim can be financed

* Customer should use their accountants and financial advisor to originate proper financing of the claim

Seek out and speak to a trusted , credible and experienced Canadian business financing advisor with a track record of business financing success to discuss your working capital and cash flow needs.







7 Park Acvenue 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


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

Every Asked Yourself If Your SR&ED Tax Credit Can Be Financed ? Spoiler Alert - It Can !

PREPARE YOURSELF FOR CRITICAL INFO ON FINANCING TAX CREDITS !

SR ED/SRED TAX CREDIT FINANCING is an important method to of raising cash - primarily for younger or higher growth firms who can utilize the capital . Claims can be financed for approx 70% of their filed value .

The financing works more efficiently when the claim is prepared by a firm with a solid track record . The formal name for the program is the Scientific Research and Experimental Development ,( hence 'SR & ED' ) program .

The Canadian government allocations well over a Billion dollars to this program annually, and it can be a valuable source of financing for many firms, particularly those in early stage. Claims are generally in the 35% + range for all r&d performed. and can include portions of a firms overhead costs!

After filing a proper SR ED claim business owners can finance that claim with our assistance. 7 Park Avenue Financial encourages all its clients to file SR ED claims where applicable, and if financing those claims makes sense we will get the job done !


Can My Canadian Sr Ed Tax Credit Be Financed/monetized?

Many Canadian firms are not aware that they can finance their SR ED tax credit claims. Lets backtrack a little bit. The SR ED Tax credit program is a Canadian government program which allows Canadian privately controlled firms to recoup a very large amount of direct and indirect expenses related to their innovative business processes, research and development, and asset acquisition related to those very efforts.

Thousands of Canadian firms file such claims and the program has disbursed close to 2 Billion dollars annually to Canadian firms.

Funds received from the government, while taxable, are NOT repayable, we repeat, NOT repayable! Claims are generally prepared by one of two parties, either the firms accountants, or, more frequently, an independent SR ED preparation firm who are experienced in the writing of these claims, and have amassed expertise and bench strength in that customers particular industry. We note also there is a growing SRED industry around film and TV credits, digital media, and gaming.

We are continually amazed at the number of companies who are eligible for the program but in fact have never heard of the program. You can imagine the expression on the business owners faces when they are told they have been eligible for the program for years, and have in fact relinquished their rights to these funds.

As a technical matter companies can only claim funds for the last 2 years of r&d, business process development, etc. Furthermore the claims have to be file at the same time the firm files annual tax returns.

Let's get back to the financing of the Sr&ed  claim!

The financing of the claims is in effect a temporary loan against the SR ED claim, allowing the company to monetize immediately the incoming cash flow related to the SR ED claim. One of the key factors around the financing of the claim is the size. Generally speaking it makes sense to finance claims that are in excess of $200,000.00.

However, realistically many smaller Canadian firms file claims significantly below that amount. While these claims are somewhat more difficult to finance it certainly can and does makes sense in many instances. Our firm has worked with many customers who view the claim as one of their most significant cash inflows during that year.

 Typically it takes between two - four weeks to arrange for a proper financing of the claim. Proper due diligence around the general financial health and prospects of the firm is done, and typical credit assessment is done around the lenders ability to properly secure the claim vis a vis a collateralized registration against the claim.

Loans against the claim are typically made at approximately 70% of the total of the combined federal and provincial claim. Why 70%? A safety buffer is in fact created in the event that the claim is adjudicated by the government and a portion of the claim is downsized or disallowed. We have noted that this happens when customers or their consultants file claims that are too aggressive. The customers mentality seems to be ' I will file a claim for $300,00.00, if they knock it back a bit I will still get more funds than originally intended '. In general this is probably not a good strategy.

In summary:

* Companies should file claims if they are eligible * If cash flow and working capital is important the SR ED claim can be financed

* Customer should use their accountants and financial advisor to originate proper financing of the claim






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 area  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.
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

Not Considering Sr&ed Tax Credit Financing Could Be Costly

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SRED loans enhance Cash flow !

Information highlighting the benefits of SR&ED Tax Credit Financing for companies using the SRED program to enhance business growth

Canadian business owners know that the SR&ED program in Canada is a huge benefit, and an incentive to the funds that Canadian firms commit to research and development - we haven’t met one firm yet who doesn’t think it’s a great program.

But are you missing out one on aspect related to ' SRED ‘, which is that you are able to implement sred tax credit financing that in effect supercharges your non repayable tax grant . Simply speaking your ability to monetize or cash flow you sr&Ed claim remarkably enhances your overall business financing.

THE SR&ED program (Scientific Research & Experimental Development) reimburses your for your R&D expenses - you know that already. So at this point a compelling choice emerges - you have the option of waiting for your cheque from Ottawa and the Provinces (you are perhaps familiar with the saying ' the cheque is in the mail’!) or you can facilitate a SRED loan to obtain your cash today.

Many younger , emerging or start up firms that we have worked with count on the cash from their SRED grant as one of the largest receivables or cash injections they will receive at one time during the year . That’s a lot of money to most firms. Actually the government statistics show that anywhere from 2-4 Billion dollars in any year go out to firms such as yours in the form of non repayable sred grants.

So how does sred tax credit financing work? Asks clients? Is it complicated, time consuming, what else is involved? Those are all perfectly legitimate questions.

We'll provide a very basic overview of the sred tax credit financing process. First things first - you need a sred claim completed and filed. In certain circumstances financing can also be done prior to filing your claim, but for simplicity sake we will focus on your claim having been filed.

If your claim has been prepared by a sred consultant with experience and reputations that plays a great factor in your sred loan approval. As you can imagine the actual sred claim it is the collateral for the loan, so we want to ensure your calim has a very significant chance of being approved. We hate to say it but it is rare that a business owner or your accountant can prepare a proper claim, simply because as in all fields of business an expert is preferred.

For the actual financing of the claim it also doesn’t hurt to work with a sred tax credit financing expert. He of she will enhance the speed of your funding, which involves simply a basic standard business financing application as well as review of the claim as we have stated. Funding is not for 100% of the claim, a very typical amount is 70%, and the other 30% is more or less to be viewed as a buffer. You can expect the whole process to take a couple weeks, which certainly isn’t bad, and if you focus on working with a sred financing expert you should have minimal delays, if any.

In summary, if the Canadian government is allocating billions to firms such as yours, clearly having cash is better than waiting for cash - consider monetizing your claim today and stay one step ahead of your competition that are still waiting for that cheque. Remember, as we said, it’s in the mail!

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

Click here for 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 .

' 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 Tax Credit Financing

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The Only Two Things You Need To Know About Sr&ed Finance

Information on sr&ed tax credit financing in Canada . Here's an overview of what you need to know about sred loans and how they maximize the cash flow potential of your refundable r&d capital tax credit

SR&ED Tax Credit Financing is somewhat misunderstood, or in fact not really considered by many Canadian business owners and financial managers in Canada. We use the word ‘considered ‘simply because many SRED claimants are not aware that their SR&ED claims can be financing as soon as they are filed – in some cases prior to filing!

So let’s return to our topic – what are the two things you need to know about financing your sred tax credit. We’ll keep it simple –

You have to have a Sr&Ed claim to obtain financing for the claim!
A sred financing claim is in fact similar to any business financing application – frankly it’s quite simpler and more focused!


Is that it? Yes, it’s as simple as that. SR&ED tax credit financing is one of the most unique ways to bring valuable cash flow and working capital back into your firm. Just the very nature of sred itself suggests that your firm relies heavily on the credit to recover the capital you have spent under the government’s quite generous non repayable grant.

So let’s return to our point # 1 – to finance a claim, you need a claim. The SRED program in Canada is the governments rebate; in effect it’s a grant, back to Canadian business for any investment you make in research and development. More and more information is coming out everyday from government and private sources which suggest that many firms who are eligible for the program either aren’t aware of it, or even more disappointing, don’t know how to go about preparing and filing a claim. We are often amazed when some clients infer that it’s ‘too much trouble ‘to prepare a sred claim.

A couple of points can be made on this subject. We have met a small handful, and we repeat small handful! Of clients over the years who prepare their own filings. This of course is possible, legal, and in some business owners minds ‘cost effective. The hard reality is that most firms don’t have the technical and financial know how to complete a claim on their own. (Apologies to the firms which successfully prepare a file their own claims – you know who you are!)

The majority of claims in the sred area are prepared by what is known as sred consultants. We tell clients that these consultants are high specialized, are up to date on current government sred and accounting matters, and in most cases work on contingency – meaning that they prepare the claim at their own risk and time, and charge a fee which is totally based on success of the final claim approval. If Canadian business owners and financial managers don’t choose to pay a contingency fee then they can play a flat rate based on the sred consultant’s time on the claim and filing. Naturally more often than not the sred fee has to be paid as soon as the claim is completed, even if you still have to wait several months to a year to get your funds.

More importantly, as it relates to the financing of the sred claim, a claim tends to be more financeable when it is prepared by a reputable consultant in this area. And in fact when you claim is financed, either at time of filing or prior, the sred consultant can also be paid in full or in part out of the financing.

So the bottom line on our point # 1 is simply – make yourself aware of the program if you are not, prepare a solid claim with the use of a reputable consultant, and be knowledgeable that the claim can be financed during preparation or at time of filing .

Let’s move on to point # 2- Clients ask, is it really that simple to finance a Sr&Ed tax credit. There is only one answer, which is of course yes. You should treat your sred tax credit financing just as any other basic financing. Because this area of Canadian business financing is somewhat of a boutique are you should ensure you are working with a credible, trusted, and experienced advisor in this area.

Let’s cover some of the very simple key basics around the financing of your claim. Most firms are eligible, under the program itself, to receive anywhere from 20-50% of your expenses in the R&D area. Your sred claim will ultimately have a final value, which is made up of the federal and provincial portions combined. Let’s assume its 200,000.00 as an example. You and your accountant have filed your year end financials, and included a sred claim of 200k. What happens now if you want to finance that claim. The reality is that you simply have to fill out a standard business financing application – just as if you were borrowing for any other matter. In our case the ‘collateral ‘, if we can call it that, it’s the sred claim. Important to note hear that you are not incurring debt or creating a ‘ loan ‘ on the sred – Your balance sheet stays intact, you are simply ‘ monetizing ‘ the sred claim in order to generate working capital and cash flow now . Generally you receive approximately 70% of the claim as an advance, with the 30% held back and payable to yourself in full when you final claim is audited, approved, and that cheque from the government is ‘in the mail ‘! The financing feels itself, associated with the tax credit financing are deducted from that final 30% holdback. You can generally create a sred loan for a period of a minimum of 60 days, but most sred financing generally last from 3-12 months, depending on the size of your claim, its eligibility with CRA, and whether you are a first time filer.

So whats our bottom line – it couldn’t be simpler:

- Make yourself aware of this great program – prepare a proper claim with someone who is experienced

- If you are focused on cash flow and working capital needs consider financing your claim and directly monetizing this great program.



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 Tax Financing : Cash and Working Capital for your R&D Credit

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SR&ED Financing ! More Than Fascinating.. and it Works!

Information on the benefits of sr&ed tax credit financing in Canada. Monetizing your refundable r&d capital refund is a key component of cash flow success around this govt program

SR&ED Financing, (also often pronounced ' SRED Financing' ... we'll use the term interchangeably ) is a tremendous way for Canadian firms to monetize their research and development tax credit claims in order to generate additional cash flow and working capital for their business .


It is of course common sense that to finance a claim and get funds now you have to have a claim filed! Canada's sred program and absolutely one of the most positive, beneficial and proactive non repayable grant programs that exists in Canada, bar none.


Over the years we have met with many clients who, unfortunately, haven’t even heard of the program, at that same time for years they have been allocating considerable funds to research and development in manufacturing, software creation, etc. We say software for a specific example, because in many ways it is one of the most obvious areas for sred, and your ability to generate a sred loan against software development is virtually almost guaranteed. But our point simply is that any R&D you do probably can be assessed for research and experimental development - That’s where the acronym comes for Scientific Research and Experimental Development = S R E D!


Many professionals in the SRED area advise our clients that out of the several billion dollars that the government hands out now for the program that almost twice as much remains unclaimed by Canadian business simply for the fact that firms have not heard of the program . One of the key cornerstones of the program is the term ' uncertainty ' - if your firm is working on products, processes etc and is unsure of the final result , and funds are expended against that research then clearly that’s SRED !


Well up to this point we have talked about the program, detailed when it is available, now let’s focus on generating cash for our R&D expense.


You have two options after you have prepared a sred claim and filed it. They are not very complex options:


1. You can wait for your technical audit, financial audit and the government cheque, which will of course arrive many months down the road. If it is your first filing the process will take quite a bit longer.


2. You can finance, or ' discount' - we can even call it ' factor ' your sred to generate a sred loan for immediate working capital.


SRED Loans can be generated immediately after the filing of your claim. Many of our clients actually start the financing process earlier, and the reality is that funds could be advanced exactly at the time of filing. Many firms are very surprised to hear that in certain circumstances you are actually eligible to receive funds during the year, prior to filing - We have termed this process as ' accrual sred financing ‘. A few more criteria are attached to this process, but isn’t it a great idea to know that your R&D could be funded along the way as you dispense your own capital for the projects.


'Whats involved in a SR&ED financing'? Clients ask. To keep things simply we simply advise that they should view a sred financing in the same manner they view and business financing or working capital financing application. It’s a clear defined process which is as follows:


- Prepare a SRED claim (more often than not with the help of an external consultant)

- File the Claim

- Complete a business financing application


It's as simple as that. Typical back up documentation and due diligence that you would associate with any financing of your firm applies.


Oh, and a final question we always get - How much can I get and how do payments work. The good news is typically there are no payments made, you get usually around 70% of the claim value on approval, and the balance could be called a holdback or buffer. When your cheque is processed by the government and the grant is mailed to you the additional 30% is of course released, less the financing charges.


Consider monetizing your SR&ED claim for valuable cash flow and working capital generation.

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