Tapping into the Potential of SR&ED Financing: Your Ultimate Guide To Sred Loans ! Blueprint to SRED Financing: Accelerate Your Business Growth

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YOU ARE LOOKING FOR SRED CLAIM FINANCE

 FINANCING YOUR SR&ED IS A GREAT CASH FLOW STRATEGY! 

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 Complete Guide to SR&ED Financing

 

 

INTRODUCTION

As a business owner seeking SR&ED tax incentives in Canada, navigating the sred  financing process can be overwhelming. Let the 7 Park Avenue Financial team show you how easy the process is from start to finish - Leverage our expertise to help fund your r&d activities confidently, and we'll demonstrate the benefits of sr&ed financing.

Companies can also take advantage of  SRED Advance Funding,  an alternative financing option in Canada that can greatly benefit businesses undertaking innovative projects in research and development,

 Your ability to finance your SRED claim (aka ‘SR&ED claim') signifies the cash flowing of your non-repayable refundable investment tax credit. At 7 Park Avenue Financial, we think that anytime you can hasten cash from the government and turn that into immediate cash flow and working capital, that is a good thing.

 

UNDERSTANDING SR&ED FINANCING

 

Financing your SR&ED claim is crucial for accessing Canadian government tax incentives and the cash flow you need to run your business.  The SR&ED program provides substantial cash incentives for companies involved in scientific research and experimental development. These incentives for sr ed expenditures can significantly mitigate the costs of your research activities.

 

SRED credits are of course the funds you received from the Canada Revenue Agency based on the filing of your Scientific Research and Experimental Development (SR&ED) claim.

 

CANADA'S TWO GREAT GOVERNMENT FINANCE PROGRAMS

 

These funds have never been more generous, and many Canadian business owners and financial managers are unaware that the program even exists, let alone their ability to partake in the billions of dollars of non-repayable grants issued by this department. Essentially it is the most significant support for research in Canada.  Many clients always ask us if there are government grants and loans. We think that the two best programs in Canada to finance your firm are the federal BIL/CSBF loan and of course, the SRED program.

 

 

WHAT IS SR&ED ADVANCE FUNDING? 

 

 

SR&ED Advance Funding allows a company not to have to wait until the end of the fiscal year or until the sr red claim is filed. The funding process is straightforward and typically takes only a couple weeks - and revolves around a simple application on the company background, information, etc and key documents relating to accrued sr ed expenses to date.

 

Following some short due diligence, the bridge loan is funded, and the company can choose to schedule when they receive their funding for work accrued to date under the pending sr&ed claim - The sr&e bridge loan funding has no monthly payments ( the interest accrues ). The loan is repaid when CRA  approves and sends the refund.

 

Timing is everything, and you can finance that claim if you want to monetize those funds and get them working inside your firm.  For many early-stage and start-up firms, the ability to finance their SRED claim is often the firm's largest receivable that year. And the beauty of the program is of course that as long as your firm is a private Canadian-controlled private corporation, businesses can participate in the program.

 

DEMYSTIFYING SRED FINANCING  & THE ROLE OF THE SR&ED CONSULTANT

 

As companies and consumers, we generally use an ‘expert' to prepare our taxes and file them. It is no different with SRED, and we recommend using an SR&ED consultant to ensure your claim is prepared correctly.

 

Naturally, using their own expertise or the government's self-assessment tool, you want to be sure you are eligible for the grant, given that it takes time to prepare and file the claim.

 

Naturally, after filing a professionally prepared claim, you are, of course, entitled to wait for your cheque – that timeframe can be anywhere from a couple of months to potentially close to a year depending on some key factors such as your first time filing, and the due diligence that SRED employees do on the technical and financial aspects of your claim.

 

SRED FINANCING - THE HIDDEN GEM IN CANADIAN BUSINESS FINANCING

 

 

So you are eligible for SR&ED.  You have filed a claim. You have been made aware you can finance the claim, but you are not sure how. The banks in Canada don’t finance these sorts of claims – that’s a general statement, but 99% of the time we are pretty sure we are correct in making that comment.

 

Contact  7 Park Avenue Financial, a business financing advisor specializing in SRED finance.  At that point, it’s a relatively simple process, and we encourage clients to view it as they would any business financing, from a lease to a loan arrangement. There is standard application information, and the whole process, up to and including funding, can be completed in weeks.

 

SR&ED CLAIM SIZE - DOES SIZE MATTER?

 

As a general rule, it makes sense to finance claims over 250k in size, but quite frankly, smaller claims can also be funded. There is no challenge to the amount of financing regarding the size of an SRED filing – Claims more than a million dollars can be easily financed.

The critical advantage of financing a claim is that you are not undertaking any debt; you are just discounting a receivable that you have – that receivable being the SRED claim itself.

 

The SR&ED filing itself is the actual collateral for the financing – and if you want more good news, then you should be aware you don’t make payments on SRED claim finance. The funds advanced are netted out from your final cheque from the government. Usually, SRED claims are financed at 75% of their filed value - that leaves a buffer in case part of the claim is downsized when approved.

 

WHAT ARE THE BENEFITS OF SRED FINANCING

 

Financing your SR&ED claim offers several advantages for your business. Companies can access cash flow from one of the best Canadian government tax incentives, which helps reduce research and development costs and facilitates ongoing innovation in product and service research and development. SR ED funding improves cash flow by providing upfront funds, eliminating the need to deplete existing reserves of cash or credit lines, and helping cover research expenses. By leveraging SR&ED claim financing, companies can sustain business growth and financial stability.

 

Companies fast-tracking r&d investments and cash-flowing claims can maintain a competitive edge with the financial stress of funding limitations.

 

SR&ED financing is non-dilutive, businesses do not need to dilute shareholder ownership, and experts know that short-term debt financing is cheaper than equity financing!

 

KEY TAKEAWAYS

 

SR&ED (Scientific Research and Experimental Development) is a tax incentive program by the Canadian government for R&D.

SR&ED financing provides funding for companies engaged in SR&ED activities

SRED Loans improve a business's cash flows  by accessing SR&ED credits in advance for accrued sred research to date - or companies can file an  entire claim at year-end

SRED financing is a loan based on the anticipated value of the SR&ED tax credit

Financing r&d efforts benefits startups and small businesses to finance research activities.

 

Business owners should ensure they  Understand loan terms, including interest rates and fees - sr&ed financing is low cost and competitive compared to other forms of debt and equity financing.

Companies must ensure they meet eligibility requirements and approval of SR&ED claims before taking financing, including documentation for third party payments.

 

 

CONCLUSION 

 

Let the 7 Park Avenue Financial team make funding your sr&ed claim fast and easy. SRED Finance is an alternative source of funding that provides predictable cash flow management and a source of funding that helps growth-oriented companies.

 

Cash flow is king, if you have an SRED claim, be aware that the claim is financeable, and your ability to get those funds working again usually puts you in a more competitive stance within your industry and allows those funds to be used for further research or any general working capital purpose.

 

Call 7 Park Avenue Financial to ensure you know the benefits of SR&ED finance – claim those funds!

   

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

  

 

What do you need to apply for sr&ed loan financing  

For a company to apply for SR&ED tax credit debt facility, the requirements are simple under financing for the sr ed claim process:

•  The business must be a Canada based company, incorporated in Canada
•  Businesses must have reasonable levels of R&D expenditure in areas of scientific or technological advancement
• Qualified expenditure for SR&ED investment tax credits in sr ed projects must demonstrate sr&ed eligibility

 

What is The  Eligibility Criteria for SR&ED Financing

To be eligible for SR&ED financing, your business must engage in scientific research and experimental development activities in areas of scientific or technological uncertainty in their business that qualify for the tax incentives offered by the Canadian government. Research and development activities must meet specific criteria, including being performed in Canada and involving a systematic investigation or search and being able to provide technical drawings, project records, payroll records, purchase invoices etc. Additionally, your activities must be conducted to achieve technological advancement, and you must maintain proper documents to support your claim.

 

  

What are Other types of Financing Options for funding  SR&ED Claims  

There are several financing options available for SR&ED claims, each with its advantages and disadvantages. The most common financing options include traditional loans, lines of credit, and government grants. Traditional loans provide you with a lump sum of money you repay with interest over time. Lines of credit allow you to access funds as needed, but you only pay interest on the amount you use. Government grants provide you with non-repayable funds to support your research and development activities.

 

 What are some tips for a Successful SR&ED Claim Financing Application?

When applying for SR ED  refund claim financing, it is essential to be prepared and organized. Ensure you have all the necessary documentation to support your claim, including financial statements, project descriptions, and supporting documents. Additionally, be prepared to demonstrate how your research and development activities meet the eligibility criteria for the tax incentives offered by the Canadian government for Canadian controlled private corporations in areas of tech, software development, and many other industries. Finally, be prepared to answer questions about your business and your research and development activities.

 

What is the SR&ED Investment Tax Credit (ITC) Program in Canada

SR ED tax credits are a valuable yet slow-to-materialize source of cash for many Canadian companies. For a company to access the payments, it must expend money on R&D within the current financial year and patiently navigate through fiscal year-end, accounts preparation, tax credit claim filing, and finally, the processing and payout of the refund by the CRA. This process can extend from 4-10 weeks. But with an SR&ED tax credit loan, you can access funds for your sr ed tax credit claim within the year the R&D spending happens, much before the CRA refund date.

 

 

 

 

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

SR&ED Tax Credits - Lowest Cost Financing for SR&ED Tax Credit Loans in Canada

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YOUR COMPANY HAS CANADIAN SRED CREDITS AND WANTS TO EXPLORE THE FINANCING OF YOUR SR&ED CLAIM! 

LET SR&ED FINANCING BE THE GROWTH FUNDING YOU ARE LOOKING FOR

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

 

 

 

SRED FINANCING IN CANADA 

 

Canadian business owners and financial managers who file for SRED credits are often not aware that these claims can be financed in order to generate working capital and cash flow out of the claim.

 

 

They are even more surprised to hear that it is actually possible under most conditions to obtain financing even prior to financing the claim.

 

WHAT IS SR&ED DEBT FINANCING

 

SR&ED debt financing solutions allow businesses to monetize their  SRED refundable tax credit in advance of receibing their cash refund from the CANADA REVENUE AGENCY/CRA.  The SR&ED  credit is in effect an account receivable and the company can fund this receivable as it requires for working capital and cash flow needs. The term 'sred factoring' is similar to any commercial accounts receivable financing.  The sred bridge loan advance against the receivable is repaid when the government tax refund is paid to the company.

 

The term sred is used by many business people instead of the formal name of the program, which is the Canadian Scientific Research and Experimental Development (SR&ED) program - which is in fact a tax incentive from the government - Another synonymous term used similarly is  ' shred'

A the end of the day it's all SR&ED!

 

SR&ED TAX CREDIT FINANCING FOR R&D BUSINESSES IN CANADA

 

What could be a better working capital and cash flow strategy than getting immediate cash flow for a government grant that is non-repayable? We frankly can think of no other risk-free way to bring valuable cash funds into your company if you are utilizing this great government program.

 

 

HOW SR&ED FINANCING CAN FUEL YOUR R&D IN CANADA

 

Are you taking advantage of one of the two most successful government programs in Canada - The r&d tax incentive?  Unbelievably there are still thousands of firms every year who either don't even know about the program, let alone use it!  Talk to a sr&ed expert to determine if you are due for your share of the 3 Billion dollars + that is doled out by the government of Canada.

 

By the way - that other successful government program? It's the Canada Small Business Financing Program, which is a lump sum term loan government guaranteed financing in participation with numerous Canadian financial institutions such as  Canadian banks and credit unions.  Other programs offered by the government under grant financing are also available.

 

UNDERSTANDING SR&ED TAX CREDIT FINANCE

 

Let’s establish some bedrock around what we are talking about. The program's formal name of course is the Scientific Research and Experimental Development aka ‘SR&ED program' that is funded by the federal and provincial governments. Each SRED claim has a federal and provincial portion, and, combined, they provided you with a non-repayable tax credit for a significant amount of the funds you spend on qualifying R&D and business processes.

 

 ELIGIBILITY FOR SR&ED FINANCING IN CANADA - WHAT THE BUSINESS OWNER NEEDS TO KNOW

 

Is your firm eligible for SRED Financing?  CRA clearly outlines the criteria for the sr&ed tax incentives. It boils down to 3 key areas - your ability to demonstrate technological advancement with the purpose of enhancing technical knowledge. Secondly, there must be an element of technological uncertainty in your work and your company's ability to demonstrate your goal of overcoming that uncertainty and those technical challenges.

Finally, the firm must show the processes that have been taken to resolve uncertainty in their r&d.

 

THE ROLE OF THE SR&ED CONSULTANT

 

Many clients we work with have their claims prepared on a contingency basis – that simply is letting someone else, known as an SRED consultant, prepare your claim and let them absorb all ( yes all ) of the cost of that claim. When you finance an SRED claim you can actually arrange to have the SRED consultant paid at the same time also.

 

Sred consultants will work with you and your accountants to file the actual sr&ed claim under the year-end T6661 form which is the actual claim for sr&ed expenditures. A technical narrative of your claim should accompany the filing as well as detailed calculations and backup on sr&ed expenditures.

 

 

SRED claims continue to be on the rise in Canada, and when you couple the filing of those claims with a somewhat challenging financial environment for business financing you have a perfect storm, so to speak, for the consideration of financing your claim.

 

The financing of SRED claims is the ultimate ‘boutique' financing business in Canada. We urge clients to work with a business financing advisor who can ensure they are receivable maximum funds and market rates, terms and structures for the amount of the claim. 

 

Clients want to know how ‘complex' SRED financing is. The reality is that you should view an SRED tax credit financing in exactly the same manner as any business financing, other than to understand perhaps that the main collateral on the SRED loan is really the claim itself. We use the word ‘SRED loan' but in reality, the SRED financing brings no debt to the balance sheet – you are simply monetizing your claim for cash flow and working capital now.

 

  

UNDERSTANDING THE SR&ED FINANCING PROCESS - HOW IT WORKS  ( SPOILER ALERT- IT'S EASY!)  

 

The essence of the entire process can be simply described under the following process

 

• SRED financing application
• due diligence
• legal/documentation
• Funding!!

 

It’s as simple as that, and we advise most clients the entire process can be completed within a few weeks, which is standard for most business financings anyways.

 

  

WHEN  SHOULD YOU FINANCE YOUR SRED CLAIM?  

 

You would only want to consider SRED financing if in fact, you don’t want to way from 1-12 months, (sometimes longer) for your grant cheque from the government. As a Canadian business that is growing, you probably have much better uses of those funds now, including reducing payables, investing in even more R&D, acquiring new business assets, etc. Accrued sr ed expenditures can be financed as you spend.

 

 KEY TAKEAWAYS - SR&ED FUNDING 

 

SR&ED Refundable tax credit incentives provide billions of dollars every year in non-repayable funds  from CANADA REVENUE AGENCY / CRA for thousands of firms in Canada like yours who invest in r&d

SR&ED credits come in the form of a refundable tax credit, and for some firms such as public companies, there is an income tax deduction.

Different types of organizations can claim sr&ed credits  - that includes, most commonly CCPC's - ie private companies, as well as individuals, foreign-controlled firms who do the r&d in Canada, as well as private individuals.

Sr&ed credits can be as much as 35% of total sr&ed expenditures.

 

CONCLUSION

 

Talk to the  7 Park Avenue Financial team about how our sr&ed tax credit financing solutions  provide a solid alternative to cash flow needs for any business in Canada that utilizes Canada's sr&ed program.  We're a trusted, credible and experienced Canadian business financing advisor for Canadian businesses. The business capital obtained by this method of financing is in the form of short-term debt financing in the form of a bridge loan that does not dilute equity ownership in the critical early stage of the growth of a business.

Your firm can fund your claim after it is filed, or if you choose, financing can be provided in regular installments as you spend on r&d under better cash management

Consider SRED tax credit financing as one more toolkit you have in your overall business strategy to access capital. Work with an expert and maximize the amount of your return and the overall most effective use of that essentially free cash flow and working capital via a sr ed loan.

 

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK  MORE INFORMATION

 

 

WHAT IS THE CANADIAN SR&ED PROGRAM 

Canada's Scientific Research and Experimental Development (SR&ED) program from the Canadian government is a tax incentive under Canada Revenue Agency that helps Canadian businesses fund research and development around work under scientific or technological uncertainty - It is often a major source of revenue and cash flow for many early-stage businesses who are working on products and processes for Canadian or global markets . Companies must ensure they are eligible and that expenses file under eligible expenditures.

Firms will typically use experience sr&ed consultants to ensure they are eligible for the tax incentive. SR&ED tax credit financing options are available for companies wishing to monetize their claims in advance of refunds under the sr ed claim process.

 

 

HOW MUCH FUNDING CAN BE CLAIMED UNDER SR&ED CREDITS 

SR ED Claims can vary based on the type of firm that is applying for a sr&ed refund under their sr ed project - as claims vary between private CCPC's (Canadian controlled private corporations ) firms and other entities such as public companies. Typical claims are in the 35% range of qualifying expenses . Companies filing for the first time can receive first-time filing assistance from Canada Revenue Agency.

 

 

 

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

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

SRED Tax Credit Financing In Canada & Funding Your SR ED Claim

Special Delivery On Your SR&ED Refund : SRED Loan Financing

OVERVIEW – Information on sr ed tax credit financing in Canada. SR ED Financing is a viable way of funding your SR&ED refund and monetizing that asset today

SRED Financing allows firms that have an r&d program to connect today to the cash flow refund they were waiting for - it's as simple as that . Monetizing that refundable tax credit is, via a SR&ED loan, is a process, as is , of course the whole process of preparing and applying for maximum refund. Let's dig in.


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.

Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with the ' special delivery' process on your SR&ED refund.




Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
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 Finance Ends The Curse Of The Refundable Tax Credit : Waiting For Your Refund Via Financing SR ED Claims

Eliminate The Downside Of SR&ED – Finance Your Refundable Tax Credit

OVERVIEW – Information on SRED finance in Canada . Financing SR&ED Tax credit claims eliminates the waiting with respect to filing SR ED refundable credits under the gov’t r&d capital refund program

Financing SR ED tax credit claims in Canada is an effective way to remove the ' curse ' of Canada's most popular program in r&d capital recovery .

Curse? Simply speaking we're referring to the amount of time Canadian firms have to wait for their refund . SRED finance maximizes the true benefit of the program - the cash flow you recover on your research investment . We're examining the 'upside' of SR&ED - cash! Let's dig in

Preparing your claim is no time for ' on the job training '. That's why pretty well everyone filing claims these days uses ' SR ED consultants' who specifically work only this area -maximizing your recovery. They are the ones that filter down all those CRA rules and calculations around the amount you can recover as well as ' writing up ' the claim in the manner prescribed by the program rules.

The amount of funding you get back in via the refundable tax credit often plays a key role in the development of many companies - from start up to those that are already in full revenue and growth mode. In fact the program is the largest program providing direct funding support - doling out billion every year to your competitors... and hopefully your firm!

The SR&ED program should not be confused with a grant or loan - it's neither, but simply a refund of a major portion of the work performed in an r&d environment for products and processes your company is working on.

Some additional ' good news' on your refund is that when you finance a claim you can include the current years refund of course, but , if applicable last years refund if it hasn’t been received of filed, as well as... the work your firm already has started on next years claim!

The amount of refund that companies receive tends to be in the 30-35% range of the total amount you spend in the program work. The other key amount to reflect on is that SRED Finance allows you receive a loan for 70% of the total amount of your combined fed/prov claim. Financing SR ED Tax credit claims comes with one other benefit - the receipt and use of the cash for your refund and no monthly payments until the govt processes your final refund, which of course can be months away - sometimes significantly longer.

If you want to eliminate ' downside' in the SR&ED program, specifically waiting for your funds! seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
with experience in SR ED finance.



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 '

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com



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

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



















Stan Prokop

Tax Credit Financing And SRED Finance In Canada :Thinking Differently Via A SR ED Loan

Alarm Clock Ringing OnYour SR&ED Claim? It’s Time To Cash Flow It

OVERVIEW – Information on tax credit financing in Canada. A SR&ED loan has Canadian firms thinking differently on their r&d capital investment. SRED finance works by maximizing the cash flow timing around your claim . Here is how and why

SRED Financing in Canada is all about using tax credit financing for the right reasons. Maximizing Canada's r&d program via a SR ED loan is all about reaping the final benefit of the program - ' Cash ' Let's dig in .

It's important to view financing your SR&ED credit as an option that's your choice as a business owner/financial manager. It's simply one more way to assist in both the R&D portion of your business as well as your general financial health. Simply speaking, being eligible for the program makes you eligible for the financing.

Refundable SR&ED credits are of course for privately owner companies in Canada. They, along with their counterpart, film tax credits are administered by CRA - Canada Revenue Agency.

Financing your SRED claim is all about cash flowing your refund - many businesses that utilize the program are at various stages of what we can call their ' life cycle '. In fact many firms that choose to monetize their claim are in start up or very early stages of development. It's at these times that cash flow and working capital are most important.

What then are the typical uses of cash when financing your R&D claim? Typically they include:

Funding additional research - many companies have an ongoing R&D program annually

Utilizing the funding to move their R&D into new markets - aka Revenues!

General working capital needs - payroll, supplier commitments

Financing growth via new orders/contracts, etc

Some clients we meet often speak of the additional time commitment required to prepare the claim. Naturally a lot of that time commitment can be eliminated by both having documentation in place, and even more importantly ' tying your horse '

to the right SR&ED consultant - it's these folks that prepare the claims for this industry. Naturally a good consultant will maximize your claim.

Utilizing the right consultant adds legitimacy to your claim - and categorically speeds up the process both in writing your claim and ensuring it moves through the govt processes at 'warp speed ' .

Businesses will appreciate that not all govt programs move at warp speed!!







By the way, if you're looking for proof of the benefits of the program you need only understand that thousands of firms just like yours (including your competitors) reap almost 3 Billion dollars a year in refunds.

A SR ED loan is all about needing, and getting your money now. It's your chance to beat the ' waiting game ' as refunds can take anywhere from 3-12 months depending on the complexity, size and filing time of your refund claim. In fact the entire finance process, when you're working with the right firm can take only a couple weeks to receive funding.

SRED Finance typically monetizes 70% of your total claim. For example a 200k claim will net you 140k in loan proceeds. Really the simply way to look at it is to view the SR ED claim as an account receivable of your business - and you're simply borrowing against that asset . By the way the financing costs of a SR&ED loan are built into one final balloon payment at the end of the loan - this is a bridge loan with no monthly payments.

If you're looking to ' think differently ' on your SR&ED refund and want to consider the benefits of financing that claim today seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your cash flow needs.



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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN SR&ED TAX CREDIT FINANCING EXPERTISE



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

A Tax Credit Financing Loan In Canada : SRED Finance Allows You To Do More With Less With Your SR ED Claim

How To Get Ahead Via SR&ED Loans

OVERVIEW – Information on the benefits of a SR&ED tax credit financing loan in Canada. SRED Finance loans are a way to monetize your SR ED credits , allowing you to cash flow refundable tax credits for working capital needs today

A SR&ED tax credit financing loan for your refundable SR&ED credits satisfies one basic need - recovering your r&d spending ! Let's dig in .


There's really only one reason to consider SRED Finance loans - accessing cash flow today, eliminating the wait around your SR ED filing. It's really as simple as that.

There are a number of ways to look at why Canada has chosen an ' incentive ' type program to encourage Canadian business owners to participate in scientific research. Canada Revenue Agency administers the program, and pretty well all top experts agree that it’s a tremendous way to receive a cash refund for qualified spending.

The majority of the SR&ED claims in Canada are prepared by external consultants who have a lot of expertise in this area. When you finance your claim you should know that the overall reputation and quality of your claim has a lot to do with that consultant. And given that the main collateral for a tax credit loan is in fact the claim itself it goes without saying that its one key factor in approving your claim for financing. Naturally if you have filed before with the same consultant things move along even more quickly.

Although the program has been around for over 30+ years in recent times significant changes have been made to the program. At the end of the day these changes could probably be summarized as follows -

Easier filing via today’s technology changes

Reduction in some of the previously allowed expenses

Pre-claim consultation and simplified online filing

A focus and disclosure requirement on who prepares your claim and for how much


Why and how does your firm finance a SR ED credit? If you're in the majority who believes ' cash is king ‘a SRED FINANCE LOAN is simply the immediate monetization of your claim. While some may view the challenge of preparing and filing a claim as work enough, just imagine the issue around waiting for your claim to be reviewed, audited, and approved.

That timeline could be weeks but quite often months. Don't forget also that the cash you receive on a SR&ED loan can be used for any general company purpose. While many firms plough back the funds into more R&D funds are also used for working capital/operating expenses, growth, etc.

Tax credit loans are financing in a very creative manner. You receive 70% of the total claim as a bridge loan. No payments are made for the duration of the loan and when your claim is approved and funded by the govt you immediately receive the balance of the claim less financing costs.

The application process? It couldn’t be more simple and basic. A typical loan package would include your financials, a copy of your SR&ED filing, and details on who prepared your claim and if you have had previous claims that were approved, the latter being important, nice to have, but not necessary.

Preparing a claim but haven’t filed yet. Your claim can also be financed on a pre-filing basis.

Looking to ' get ahead ' in R&D spending. Consider SRED finance loans as a quick way to monetize the tax credit asset. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

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


7 PARK AVENUE FINANCIAL = CANADIAN SR&ED TAX CREDIT FINANCING EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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 '

Stan Prokop

Financing Research And Development Tax Credits : SRED Finance Is The Easy Part Of Your R & D

The Short (And Long ) Answer is ‘ Yes ‘ : SR&ED R&D Tax Credits Can Be Financed

OVERVIEW – Information on financing refundable research and development tax credits in Canada. SRED Finance loans monetize your claim and provide .. cash flow today!

Financing research and development (R&D) tax credits in Canada is really the end to a successful outcome of your SR&ED claim. There's been a healthy dose of ' no you can't ' when it comes to a lot of the changes in the program over the last several years. SRED Finance loans are the positive monetization of your claim - in effect the easy part! Let's dig in.

Most Canadian business owners and financial managers who participate in the benefits of the program probably though do realize that for a program that has been around close to 30 years there was probably some ' Times They Are A Changing' ) that were due . (Apologies to Bob Dylan who it turns out wasn’t writing about refundable tax credits)

While top experts and pundits maintained the program was ' broken ' it nevertheless continued to fund Billions of dollars every year for thousands of firms enhancing their business prospects through research. Anything that involves both provincial and federal governments is of course going to evolve.

Participants in the program of course know the basics - it's all about proving some sort of technological advancement. Here it’s about documenting your spend on fixing ' uncertainty ' and trying to progress to ' technological advancement’


After your claim has been filed you're in a strong position to... you guessed it... wait! That waiting can be totally eliminated by utilizing a SR ED bridge loan to monetize your filing, accessing your cash now... instead of weeks, months, or longer? based upon whatever status your claim is in with Canada Revenue. In some cases that of course might be financial or technical audit, in other cases just the bureaucracy that comes with those nice folks in the government.

How then does a SR&ED loan work? It could not be simpler and in fact we maintain that if there’s been changes to the financing of the program they have all n fact been quite positive! SRED loans are financed as bridge loans. You receive 70% of the total value of the claim on approval of the loan. The key collateral of the loan is, as you might surmise, your SR ED.

No payments are made for the duration of the loan, and when claims are finally approved you receive the balance immediately less financing costs which are mezzanine in nature due to the risk profile of this type of financing.

Financing research and development tax credits is a pretty easy decision - it boils down to:

Do you need the cash today and what use can be made of the funds? It's really the ' opportunity cost ' that you are looking at. Funds of course can be used for what the accountants call ' any general corporate purpose ‘. That of course includes operating financing, purchasing new assets, or doing more R&D!

Oh by the way, even next years claim can be financed today if you have a track record or can demonstrate a quality claim with your SR&ED consultant.

Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your financing needs in research tax credits. It's the ' easy ' part of research.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

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

7 PARK AVENUE FINANCIAL = CANADIAN SR&ED CLAIM FINANCING EXPERTISE







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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 '

Stan Prokop