Bridge Loans for SRED: Turning Tax Credits into Cash Flow

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YOU ARE LOOKING TO MAXIMIZE SR&ED BENEFITS WITH SR&ED FINANCING YOUR SRED CLAIM

Maximizing Cash Flow: How Bridge Loans Supercharge Your R&D Projects

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

Let us help your firm just like our hundreds of other satisfied clients.

        Financing & Cash flow are the biggest issues facing business 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

Or Email us with any question on Canadian Business Financing

EMAIL - sprokop@7parkavenuefinancial.com

 

Maximizing Business Growth with SR&ED Financing Bridge Loans | 7 Park Avenue Financial 

 

 

 

Accelerate Your Innovation: SR&ED Bridge Loans Demystified

 

Why consider SR&ED financing? Read on because we're about to show you how it can accelerate your R&D projects and boost your working capital

 

 

 

Unleashing the Power of SR&ED Claim 

 

Gimme a reason. That’s what clients often ask when we talk to them about the benefits of both filing an SR&ED claim and then considering SRED financing as a cash flow strategy around SRED funding for sr ed credits/sr ed projects in Canada for cash management and cash flow and working capital.

 

 

The SR&ED Program: A Valuable Resource 

 

You want reasons, and we have reasons for you to consider...Businesses of all sizes in Canada utilize the SR&ED program in Canada to be eligible to receive a huge portion of their expenses in R&D via a non-repayable tax credit.

 

  

Surprising Benefits of SRED Financing  

 

When we tell clients they can utilize an SRED financing strategy to increase cash flow and working capital via the R&D credit, well, frankly, they almost can't believe it.

  

 

Eligibility and Components of an SR&ED Claim  

 

There isn’t a day when the government issues cheques for millions of dollars on the Scientific Research and Experimental Development (aka SRED!) Program, so let’s all agree that you are eligible for your share. And if you're working on processes and products and redesign in your industry then the salaries, products and equipment and even some overheads are taken into account when you file an SRED claim.

 

  

SR&ED Claim Process  

 

The SR&ED claim process is tied to the Canada Revenue Agency. They receive your claim and process it at the same time you file your year-end tax return. If you are okay with 'waiting’... and most of our clients are not, you will get a significant cheque back from Ottawa in a number of months.

 

  

Accelerating Your SR&ED Refund  

 

Clients are always asking us how long they have to wait for a refund, and if there is any way to speed up the process. Far be it from us to be the ones to be telling someone from the government to speed up the process. But what we do advise clients to consider is to finance their SRED funding credit as soon as they file it.

 

  

 Financing Your Tax Credit   

 

Why would you want to finance a tax credit?

There are only two reasons, cash flow and working capital now! By monetizing your tax credit you are in a position to take the government rebate and put it to positive use within your company. And what are those positive uses? It's the basics - reduce your payables, buy new equipment, reinvest in your entire SR&ED claim process to increase your competitive advantage...and on it goes. Basically, use those funds for any worthwhile purpose.

 

  

Speed and Simplicity of Financing  

 

How long does it take to finance a claim and what's involved? That's not an atypical question. In our experience claims are financed within two to three weeks. And could the process be any more simple - it's all about completing a simple business financing application, utilizing your SRED claim as collateral, and undergoing any normal due diligence. Claims of any size can be financed, it typically makes sense to finance claims that are in excess of 100k... but smaller claims can be monetized also.

 

SR&ED Financing for Startups and Small Businesses

 

While larger companies often utilize SR&ED financing, it's less commonly known that startups and small businesses can benefit immensely from it. Startups can use SR&ED financing to accelerate their R&D initiatives, attract investors, and gain a competitive edge in their industries. This approach allows them to compete with more established players and secure funding while navigating early-stage challenges.

 

 Environmental and Sustainable SR&ED Financing 

 

In an era of growing environmental awareness, some businesses are focusing on R&D projects related to sustainability, renewable energy, and eco-friendly technologies. SR&ED financing can be used to support projects aimed at reducing carbon footprints, conserving resources, or developing sustainable products. This uncommon take aligns SR&ED claims with broader environmental and social goals, contributing to a greener future while benefiting from tax incentives.

 

  

Key Takeaways  

 

SR&ED financing is a working capital financing strategy that leverages the Scientific Research and Experimental Development (SR&ED) program in Canada to secure funding for research and development projects.

Bridge Loans: These are short-term loans designed to provide immediate funding while waiting for SR&ED tax credits. Bridge loans bridge the gap between filing a claim and receiving the actual credit.

SRED Claims: Refers to claims made under the SR&ED program, where businesses can recover a significant portion of their R&D expenses through non-repayable tax credits.

Cash Flow Management: Understanding how SR&ED financing and bridge loans can improve a company's cash flow, helping it meet financial obligations and invest in growth.

Canada's SR&ED Program: A brief overview of the Canadian government's program that incentivizes businesses to conduct research and development activities through tax incentives.

Collateral: SR&ED claims can be used as collateral for bridge loans, reducing risk for lenders and making financing more accessible.

Application Process: A simplified explanation of the process involved in applying for bridge loans, which typically includes completing a financing application and undergoing due diligence.

Timely Financing: The importance of financing SR&ED claims promptly to put the funds to productive use within the business.

 

Conclusion

Call 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor around SRED funding Canada claims for Canadian businesses.  And use that cash flow which you have achieved in a timely fashion to grow your business strategically and achieve  sales and profits.

 

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

What is SR&ED Financing?

SR&ED financing involves using bridge loans to access immediate funds while awaiting tax credits for research and development efforts for eligible expenditures in Canada. The goal of the program is to support research and encourage Canadian businesses to invest in R&D  and overcome technical challenges in their respective industries. Software development firms are a large part of sred claims filed in Canada.


How do Bridge Loans Benefit Businesses?

Bridge loans bolster cash flow, enabling companies to invest in growth, fund material costs, and reduce payables, and stay competitive while waiting for the tax incentive and SR&ED refunds.


Can Any Business Apply for SR&ED Bridge Loans?

Yes, businesses eligible for SR&ED tax credits can apply for bridge loans, typically with claims exceeding 130k being the most viable candidates. Work in areas such as sales promotion quality control, etc does not qualify under the program and is not true ' technological advancement'.


How Quickly Can I Secure SR&ED Financing?

In most cases, the SR&ED financing process takes two to three weeks, offering a swift solution to cash flow challenges. Accrued sr ed work can also be financed prior to a final filing of your claim with your income tax return.


What's the Role of Collateral in Bridge Loans?

SR&ED claims often serve as collateral for bridge loans, reducing risk for lenders and making financing more accessible to businesses.


Are there tax implications for SR&ED financing?

SR&ED financing is generally tax-neutral for Canadian controlled private corporations,  as it involves accessing your own tax credits early, but consult your tax advisor for specifics.

What is the typical interest rate for bridge loans?

Bridge loan interest rates can vary but are often competitive, and they provide valuable benefits to many businesses beyond traditional loans via the tax refund itself.


Can SR&ED financing impact my eligibility for future tax credits?

Generally, SR&ED financing doesn't impact eligibility for future credits, but it's wise to consult with experts for tailored advice around your work in sred and scientific and technological uncertainty to ensure you have furthered technical knowledge in your r&d efforts to achieve technological advancement and avail your business of tax refunds.

Are SRED  bridge loans only for large companies?

No, bridge loans can benefit businesses of all sizes, especially those with substantial R&D expenditures seeking cash flow optimization.


What if my SR&ED claim is smaller? Can I still apply for financing?

Yes, even smaller SR&ED claims can be financed under the sr ed investment tax credit program for work in scientific and technological advancement-   it depends on your business's unique financial needs and goals.




 

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

Sr&ed Or Sred? – Call It What You Want But Take Advantage of SRED Funding Or Factoring!

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YOU WANT SR&ED FINANCING – FINANCING YOUR SR&ED CLAIM

SR&ED Financing: The Lifeline for Canadian Businesses

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

Let us help your firm just like our hundreds of other satisfied clients.

        Financing & Cash flow are the biggest issues facing business 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 us with any questions on Canadian Business Financing

                          EMAIL - sprokop@7parkavenuefinancial.com

 

SR&ED Financing: Canada's Best Kept Secret for Funding Innovation

 

Semantics, we tell clients. You can call it your SRED claim, your Shred claim (they use that a lot also!) or your SR and ED claim.  You can even throw in an ampersand and correctly write it as SR&ED.

 

INTRODUCTION

 

Have you ever wondered about the mechanisms the Canadian Government utilizes to bolster innovation and technological evolution across the nation? The key lies in an essential, albeit frequently underemphasized financial instrument named Scientific Research & Experimental Development (SR&ED) financing.

 

SR&ED, colloquially pronounced as "sred," is a tax incentive scheme orchestrated by the Canada Revenue Agency (CRA). This program stimulates enterprises of varying magnitudes and sectors to engage in research and development (R&D) within Canadian borders. The ultimate objective is to stimulate inventive thinking, catalyze technological progress, and fortify the nation's economy.

 

 

 

WHY  SR&ED FINANCING IS CRITICAL FOR CANADIAN BUSINESSES DOING R&D 

 

In today's intensely competitive landscape, innovation is the lifeblood of business sustainability and expansion. However, there's a caveat - research and development endeavours aren't cheap. They necessitate considerable financial commitments and carry associated risks. This is precisely where SR&ED financing enters the picture, serving as a crucial financial safety net for businesses, helping alleviate the monetary impact of their R&D initiatives.

 

Revolutionizing Business Growth with SR&ED Financing in Canada

 

So there is only one bottom line, so you aren’t considering financing your claim. Putting our semantics aside, many business owners and financial managers are inquiring as to the financeability of their claims. More often than not, they have been told by their bank that this type of claim is not financeable, and even though you are showing it on your books as a receivable, it cannot be margined for working capital and cash flow.

 

Canada's SR&ED Financing: The Fuel for Your Business Innovation

Two words. They are wrong, as SR ED claims can be financed in many situations. They are funded utilizing SR ED Canadian business financing advisors experienced in this niche area of Canadian finance.

We believe it’s always good to recap the basics and set the stage for our financing discussion.  The program is of course, a federal program, in concert with the provinces, that encourages small, medium, and, dare we say it, large corporations to research products, processes, etc.

How committed is the government to this program? Very we say, given that approximately 4 Billion dollars are doled out each year to the 1/3 of the companies that take advantage of the program.  That infers that 2/3 of eligible customers don’t use the program.

 

We have heard a litany of reasons why they don’t hear from clients - they include - we're too busy, it sounds complicated, we don’t want to get audited, our R&D spending is not large enough, etc.  These firms would be better off keeping it simple and saying, 'No, we don’t want funds that are non-repayable that reimburse us for our R&D' because that’s, in effect, what they are saying.

 

HOW DOES SR&ED FUNDING WORK?

 

While you anticipate the approval of your SR&ED claim from the CRA, acquiring third-party financing is an option. Such an approach can offer immediate resources, ensuring your R&D activities continue unhindered.

 

Though initially, the terrain of SR&ED financing might appear intimidating, mastery over it can transform the trajectory of your business.

 

The initial stage involves discerning whether your project meets the SR&ED financing eligibility. The CRA lays out detailed criteria centred around technological progression and uncertainties, systematic inquiries, and concrete evidence. The application for this tax credit can be initiated by completing designated forms in your corporate tax return.

 

HOW MUCH FUNDING CAN YOU RECEIVE WHEN YOU FACTOR YOUR SR ED CLAIM

 

If you have a valid claim prepared by either an experienced internal party, more preferably, a true SRED consultant, then you can finance your claim. Funds for approximately 75% of the claim value are provided to your firm, with the SR ED receivable collateral.  Of course, you can wait 3, 6, or 12 months to receive your funds, but why not consider putting that valuable cash flow and working capital back to work in your business?

 

  

THE BENEFITS OF FACTORING YOUR SR ED CLAIM   

Clients who finance SR&ED claims typically use the funds for general working capital, further R&D, new equipment, marketing, etc. The bottom line is that you choose the use of the funds.  And by the way, that other 25% of your claim is still yours; of course, it’s returned to your firm, less financing costs when the government sends your cheque.

 

And get the news gets any better, but no payments are made on the SR ED loan. Interest accrues and is calculated at the end of the financing.
 

 

Having dissected how SR&ED works, it's time to understand its benefits. Besides the obvious financial relief, SR&ED financing offers numerous other advantages.

 

Enhanced Cash Liquidity: The SR&ED tax credits notably amplify your cash flow, enabling you to utilize these funds for procuring advanced equipment, onboarding proficient professionals, or supporting your next R&D endeavour.

1. Risk Deterrence: R&D investments inherently carry risks. SR&ED financing helps diminish these risks by compensating for some of the expenses, encouraging businesses to pursue innovation without the stress of financial constraints.

2. Expedited Innovation: By mitigating financial anxieties, companies can devote more resources to fostering innovation, heightening their competitive position in the market.

 

 

 

ELIGIBILITY CRITERIA FOR SR&ED

 

SR&ED financing isn't universally applicable to all projects or businesses. It's crucial to comprehend the qualifying conditions, which predominantly focus on technological evolution and associated uncertainties. If your company is engaged in creating novel materials, devices, and products or enhancing existing ones through R&D, the likelihood of qualification is considerably high.

 

THE COMMON MISCONCEPTION ABOUT THE SR&ED PROGRAM

 

Erroneous beliefs surrounding SR&ED financing can sometimes discourage enterprises from availing their rightful incentives. A common fallacy is that SR&ED is exclusive to tech or science-related fields. Contrarily, any industry striving for progress via R&D activities can be eligible.

 

Canada's Scientific Research & Experimental Development (SR&ED) program is industry-agnostic and is not limited to specific sectors. However, certain industries frequently participate in the SR&ED program due to the nature of their operations, which often involve extensive research and development activities.

 

These include, but are not limited to:

 

1. Technology & Software Development: Many software and technology firms constantly innovate to stay competitive. This often involves developing new software, refining algorithms, or creating more efficient systems.

2. Pharmaceuticals & Biotechnology: Companies in these industries often conduct rigorous R&D activities, developing new drugs or refining existing ones, leading to potential SR&ED claims.

3. Manufacturing: Process, materials, or equipment innovation can lead to significant technological advancements. Manufacturers often engage in such activities, making them eligible for SR&ED incentives.

4. Agriculture & Agri-food: Innovation in crop yield improvement, farming methods, or food processing technologies can qualify for SR&ED.

5. Environmental & Clean Technology / 'Cleantech": Companies in this sector often develop new, more efficient technologies to solve environmental issues, making them potential SR&ED claimants.

6. Aerospace & Defense: These industries involve high engineering and technological innovation levels, making them good candidates for the SR&ED program.

 

Please note that these are just examples, and many other industries could also qualify based on their specific R&D activities. It's essential to check with a tax professional or directly with the CRA to determine eligibility.

 

KEY TAKEAWAYS ON SR&ED

1. SR&ED Overview: The Scientific Research & Experimental Development (SR&ED) tax credit is the Canadian federal government's largest single source of support for business-led R&D projects. It annually provides over $3 billion in tax incentives to over 20,000 claimants.

2. Funding Amount: SR&ED tax credits cover up to 69% of labour and overhead costs, 36% of contractor costs, and 45% of material costs. All expenses must be directly related to the company's scientific research and experimental development activities.

3. Eligible Applicants: Applicants eligible for the program must be engaged in basic research, applied research, or experimental development in Canada, creating new products or processes or making incremental improvements.

4. Eligible Expenditures: Eligible costs include labour, contractors, materials, and overhead costs directly correlating to the activity required to address technological uncertainties, obstacles, or challenges.

5. Program Deadlines: Applications must be submitted within 18 months from the end of the tax year in which the qualifying expenses were incurred.

6. Amount of Tax Credit: The program offers different funding levels depending on the eligible expense: up to 69% for labour, 36% for contractors, and 45% for materials. Most provinces and territories also offer additional support, between 3.5% and 30% of eligible qualifying expenditures.

7. Canadian-Controlled Private Corporations (CCPC): Canadian-owned businesses may earn a refundable Investment Tax Credit (ITC) at the enhanced rate of 35% on qualified SR&ED expenditures of up to $3 million. Expenses beyond this threshold attract a non-refundable ITC at 15%.

8. Other Corporations, Individuals, and Trusts: These entities can earn a non-refundable Investment Tax Credit (ITC) at 15% on qualified SR&ED expenditures.

9. Members of a Partnership: The Investment Tax Credit (ITC) is calculated at the partnership level and then allocated to eligible members.

10. Project Eligibility: Projects must conduct experimental development or research activities with some uncertainty and risk. Labour expenses will cover the portion of an individual's role that revolves around such experimentation. Materials and supplies must relate to qualifying projects.

11. Claimable Expenses: Labour is based on time spent on eligible activities in Canada. Contractor claims must be related to SR&ED performed in Canada. Materials must be consumed or transformed for the project. Overhead can be claimed either using a proxy method (55% of adjusted labour costs) or the traditional method (directly related and incremental to the prosecution of SR&ED).

12. Program Deadlines & Review: SR&ED claims must be filed within 18 months of the fiscal year-end. CRA can review the claim to determine if the projects meet the SR&ED definition under the Income Tax Act. Approved tax credits may be refundable, used to offset taxes payable, or carried forward for up to 20 years. These carry-forward credits may survive mergers, acquisitions, amalgamations, and wind-ups under certain conditions.

 

 

 CONCLUSION 

 

 

With Canada persistently prioritizing innovation and technological advancement, the significance of SR&ED financing as a key resource for businesses cannot be overstated. The program is projected to refine and expand, catering to various industries continually.

 

SR&ED financing is a robust impetus for Canadian enterprises, fuelling growth, fostering innovation, and cultivating success. Gaining insight into its mechanisms and advantages can establish a solid foundation for financial robustness and consistent development in your R&D initiatives.

SR&ED financing is more than just a fiscal instrument—it's a gateway to construct, innovate, and escalate. So, are you prepared to unleash the utmost potential of your business with SR&ED financing?

 

Don’t fail to consider SR&ED financing as a way to stay one step ahead of the competition and simultaneously satisfy your cash flow and working capital needs. Call 7 Park Avenue Financial, a trusted, credible and experienced SRED Canadian business financing advisor, to assist you with factoring your claim.

 

  

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

 

   What is SR&ED financing? 

 Scientific Research & Experimental Development (SR&ED) financing is a tax incentive program the Canada Revenue Agency (CRA) offers. It's designed to encourage businesses of all sizes and across various industries to conduct research and development activities within Canada. Businesses can recover some of the costs associated with their R&D activities by claiming tax credits through this program. Visit 7parkavenuefinancial.com

 

 How does SR&ED financing support businesses?

 

 SR&ED financing supports businesses by enhancing their cash flow and reducing the risks associated with R&D activities. Funds from SR&ED tax credits can be used to invest in new equipment, hire skilled professionals, or fund future R&D projects. By offsetting some of the R&D costs, SR&ED financing encourages businesses to continue innovating without the fear of financial constraints. Visit 7parkavenuefinancial.com

 

 What types of businesses or projects qualify for SR&ED financing?

A wide range of industries can qualify for SR&ED financing, not just those in the tech or science fields. The primary criteria revolve around technological advancements and uncertainties. If your business is engaged in creating new or improving existing materials, devices, products, or processes through R&D, there's a high chance you may qualify. Visit 7parkavenuefinancial.com

 

Can SR&ED claims be financed before they are filed?

Yes, in many cases, businesses can seek third-party financing while waiting for their SR&ED claims to be processed by the CRA. This can provide immediate funds to continue your R&D activities without any interruption. As a finance firm, we provide such pre-claim financing options to eligible businesses. Visit 7parkavenuefinancial.com

 

 How can I apply for SR&ED financing for my sr ed tax incentives?

To apply for SR&ED financing, businesses must fill out specific forms in their corporate tax return detailing the R&D activities conducted for eligible expenses, their purposes, outcomes, and associated expenses. Consulting a tax professional or a specialized SR&ED consultant can be beneficial to ensure the claim is appropriately prepared and maximized for your refundable tax credits. Visit 7parkavenuefinancial.com

 

 How does SR&ED financing affect my business's cash flow?

SR&ED financing directly improves your business's cash flow by providing a tax credit for eligible R&D expenses under the tax credit program. You can reinvest more money into your business from those sr ed credits for hiring, equipment procurement, or future R&D projects for a sr ed tax credit claim. This is especially important if you're a start-up or a small-to-medium-sized business where cash flow is critical when waiting for the sr ed refund. Visit 7parkavenuefinancial.com

 

What happens if my SR&ED claim is denied or reduced by the CRA?

If your SR&ED claim is rejected/denied by the CRA because of sr ed tax credit eligibility, you have the right to object and provide additional supporting information. However, preparing and presenting your claim to minimize such risks accurately is crucial. As a finance firm offering SR&ED claim funding, we work closely with you to ensure your claim meets all the necessary criteria. Visit 7parkavenuefinancial.com

 

 

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

Sr&ed Loan And Sr&ed Funding At The Speed of Light !

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YOUR COMPANY IS LOOKING FOR CANADIAN SR&ED FUNDING!

Power Up Your R&D Projects: How SR&ED Loans and Funding Fuel Canadian Innovation

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

 

Discover the Secret to Non-Dilutive Financing: SR&ED Loans and Funding for Canadian Innovators

 

An SRED funding loan has been a key advantage of business owners & financial managers who take advantage of Canada's SR&ED program. As our good friends at BDC say its  ' financing r&d without breaking the bank !

 

 

 

INTRODUCTION

 

Canada's Scientific Research and Experimental Development (SR&ED) tax credit financing has proved to be a critical tool for Canadian businesses looking for assistance in their r&d activities - By enabling companies to finance their refundable tax credits in advance of filing their claim the Sr&ed Finance solution provides cash flow when companies need it most in their growth and innovation strategies. 

Let's dig in on maximizing sr&ed benefits via the financing of sr&ed claims in Canada and your sr ed eligibility.

 

WHAT IS SR&ED TAX CREDIT FINANCING?

 

 
 

Sr&ed tax credit financing allows your business to access capital via a short-term cash flow loan using your refundable tax credits as the only collateral for the loan. Although some companies choose to explore grant financing for r&d activity the actual SR&ED program is the government initiative that helps a business invest in research and development, encouraging innovation in Canada.

 

The prompt receipt of your R&D capital tax credit is quite often a key part of your overall cash flow strategy. While it’s not quite the ‘speed of light' it’s still quicker than almost all other loans in the business.  We're covering some key SR&ED financing basics - let's dig in.

 

 

PREPARING YOUR CLAIM - THE ROLE OF YOUR SRED CONSULTANT 

 

The true power of the SR&ED PROGRAM comes when you accelerate your claim and turn it into immediate cash.  Most of our clients, as sophisticated as they might be in their SRED filings actually also haven't heard that in certain cases your SRED can be considered for financing. 

 

In fact, the majority of claims are prepared by third parties called ' SR&ED Consultants' who in many cases focus only on claim prep, not financing the claim.

While a business does not have to work with a third-party independent sr&ed consultant the majority of businesses in Canada filing sred claims do in fact work and benefit from using these consultants. They help ensure a successful claim and filing and provide a nice level of assurance for the financing of your claim around the eligible expenses you have claimed. Many consultants specialize within certain industries, which is a further benefit in maximizing more of a refund.

 

Most sr&ed consultants work on a contingency basis, which is an additional appeal to the business owner.

  

THE SR&ED FINANCING PROCESS  

 

 

Accessing your sr&ed loan promptly has never been easier -  A simple business finance application with details about your sr&ed claim will generate a loan agreement term sheet. Most funds are distributed within a 2-week period and any claim greater than 100k can be quickly financed - Small claims can be considered under certain conditions. Talk to the 7 Park Avenue Financial team about how you can achieve the lowest cost financing in Canada around financing your refundable tax credits.

And by the way, no personal guarantees are required!

 

The program is by far the best program in Canada that incorporates a non-repayable grant for your firm's R&D work.  Many clients hear about 'government grants and loans' and ultimately realize these are not as available as one would think - however SRED is everything you hoped for... and more.

 

Even more important is that claims can also be financed PRIOR to filing - That whole process is called SR&ED accrual financing.

 

 5 THINGS YOU NEED TO KNOW ABOUT SRED FUNDING! 

 

What then are your 'must-knows' when it comes to SRED funding?

 

 

1. SRED is highly specialized - seek and work with a trusted, credible an experienced consultant to prepare your claim, as well as a credible business financing advisor to fund your claim immediately.

 

2. The only thing you need to know about financing a claim is that you must have a claim! It is a simple business financing application with supporting backup on your SR&ED - your actual refund is the key collateral in the claim.

 

3. SREDs are financed at 75% of your total claim value - No payments are made during the duration of the short-term sred loan

 

4. You can finance a claim as soon as it is filed; starting earlier simply accelerates the process. And remember, you can opt to finance prior to filing under accrual filing. It is kind of like an SRED line of credit.

 

5. We refer to an SRED ' loan ' - the reality is that no additional debt is added to your balance sheet because the loan is offset by the asset, the claim itself! You are simply monetizing, or ' cash flowing ' your claim.

 

As you can see by now the whole process of SR&ED Finance is simply the financing or 'factoring' of your claim. You are selling your right in the receivable now in lieu of cash that you will receive from the government many months from now, in some cases close to a year.

 

A QUICK RECAP / PRIMER ON THE SR&ED LOAN

 

5 key basics. As we noted SR&ED funding is specialized. Work with an expert for two reasons - maximizing the value and finance rate on your transaction, as well as ensuring the whole process goes smoothly.  You should not view the SRED loan process any differently than you would any other financing, you apply, you provide supporting backup, and you receive your funds after the normal sort of due diligence. The collateral, if we can call it that, is the SR&ED claim itself.

 

With respect to # 2 simply focus on the fact that you should consider financing the claim if it will generate a reasonable amount of working capital and cash flow that you need today. To be honest, most claims that are financed are in the 100k ++ range, but smaller claims can be effectively financed

 

Point #3 had us referring to loan to value - you can expect to receive an immediate advance on approximately 75% of your claim - that is the combo of the federal and provincial components. The balance is a holdback - it’s still your money, but final financing costs, plus any adjustments the government makes to your claim are accounted for in that 30% buffer that is held back by the lender.

 

"When can we obtain our funds?" is really the meaning of our 4th point. The entire process takes approximately 2-3 weeks as it covers your application, review of your SRED, normal financial due diligence, and the clarification of any issues raised by your firm or the SRED finance firm.  And the good news here is that again the term 'SRED funding loan' is a misnomer - you don't make any payments, and finance charges simply accrue and are deducted from the final accounting of the claim. That covers our 5th point of course.

 

 HOW CAN MY BUSINESS MAXIMIZE SR&ED FINANCING / FUNDING 

 

A business has a number of opportunities to maximize SR ED Financing

 

Companies  have tremendous flexibility in choosing how much of their claim they wish to finance and  when disbursements  are made

 

If a business has other tax credits these can be combined into the sr&ed loan

 

Sr&ed loans are an effective cash management  tool around utilizing sr&ed refunds when cash is needed to further r&d as well as helping to fund day-to-day operations and long-term growth and valuation objectives

 

 

KEY TAKEAWAYS ON THE BENEFITS OF SR&ED FINANCING

Numerous benefits around sr&ed funding for refundable tax credits include:

Quick access to cash - eliminating  the sr&ed CRA waiting process around your claim and refund

Sr&ed loans are a form of short-term debt financing that is non-dilutive to owner equity - businesses retain ownership  and control of the business

Sred loans are flexible - as well as no monthly required payments during the duration of the loan financing is competitive when it comes to rates compared to high-cost short-term working capital loans/merchant cash advances, or permanent working capital loans with long amortizations

 

 

 

CONCLUSION - SR&ED Financing Revolution: Transforming Canada's Research and Development Landscape

 

 

Bottom line - if you're a user of the SR&ED program consider SRED funding to solve that challenge of cash flow/working capital tied up in your R&D capital investments.

 

The financing of sr&ed tax credits has become one of the most valuable resources for firms committed to r&e - The combo of quick funding, good interest rates, and flexible repayment options allows businesses performing research and development to maintain a lead in today's competitive domestic, and yes, global economy!

 

A company's ability to understand how easy the sr&ed finance process is, combined with a quality claim with the help of a sr&ed consultant helps ensure the long-term economic and financial success of the business.

 

Talk to  7 Park Avenue Financial about sr&ed financing services with the lowest financing cost in Canada with a total focus on a quick and smooth application process via a trusted credible and experienced Canadian business financing advisor for funding solutions.

 

 

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

 

What is SR&ED funding?

 

The Canadian SR&ED (Scientific Research and Experimental Development) funding program is a Canadian government investment tax credit incentive program designed to help and encourage Canadian businesses to invest in r&d activities.

By providing cash refunds against refundable tax credits eligible companies receive assistance for their expenditures on eligible R&D SR&ED funding loans can significantly reduce a company's research and development costs and provide financial support for further innovation in a competitive economy in domestic / global markets.

 

 What is an SR&ED loan? 

 

SR&ED loans are a financing option that allows businesses performing r&d to access their future SR&ED refundable tax credit receivables in advance of the Canada Revenue Agency refund. This allows companies to fund working capital needs based on qualified sr&ed tax credits from CRA - By eliminating the waiting process for refunds the company receives cash based on the collateral provided on the tax credit refund.

 

  

How does the SR&ED program work?  

 

Canada's  SR&ED program provides cash refunds for tax credits to eligible businesses for their qualified research and development expenses, Companies must ensure their r&d projects involve work in 3 areas-

Technical advancement / technical uncertainty, and technical content. Companies file their claims annually based on eligible criteria as defined by CRA. When claims are reviewed and approved tax refunds are issued to the business based on this tax incentive program.

 

Who can claim SR&ED credits?

SR&ED credits are claimed by Canadian incorporated companies / Canadian controlled private corporations,  as well as proprietorships, and partnerships that carry out eligible r&d activities in Canada. The eligibility of a company for sr ed tax incentives focuses on the nature of the research and development as well as challenges encountered in the area of technical advancements. Canadian companies and businesses of any size can claim sr&ed eligible expenditures, and every industry is eligible to claim sr ed refund credits for r&d projects provided they meet program requirements under scientific or technological uncertainty.

 

 

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

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A SRED financing tax credit loan is a great example of the good news around Canada's SR&ED program. If there's any 'bad news' it’s around the fact that once again some industry pundits are again wondering about the true benefit to Canada under its current ‘Scientific Research & Experimental Development' (aka 'SR&ED'!) program. SRED CANADA is Canada's premier refundable tax credit.

WHAT IS SR&ED

Canada's non-refundable tax credit program involving your investment in r&d capital is called the SR&ED program. Most business folks refer to it as 'SRED' and the government term is actually SR&ED (Scientific Research and Experimental Development) Program. It provides financing support to Canadian firms such as yours who invest in new processed and technologies to advance business and science.

Canadian provinces also partner on the program, providing additional assistance. SR&ED (Scientific Research and Experimental Development) Program is the flagship investment incentive program created by the Canadian government via tax credits.

It provides financial support to Canadian companies that are involved in creating new or improving existing technologies, with the aim of stimulating scientific advancement in the country. Most provinces have their own programs to encourage scientific R&D, which provides supplemental assistance to SR&ED claimants.

As one of the best of its kind in the world, many countries have followed Canada’s lead in setting up similar programs. It also makes it even more important to realize the quick and efficient cash recapture of your R&D capital investment via the help of an SR&ED finance consultant. Let's dig in.

While thousands of firms are still aggressively planning to file claims via their SR&ED consultant for their non-repayable tax credit refund, just as many might be wondering if financing that claim is still valid and accessible. The answer - a resounding yes!

While some business owners might view the program as a bit of ' danger and complexity ' that's definitely not the SRED loan process - which is, to put it simply - easy! We're the first to admit that properly preparing and submitting a claim is not for newbie and the weak of heart. Never has been your ability to prepare a proper claim, with proper assistance more important. The 1400 words and 3 questions you are required to address have never seemed more important.

Statistics in recent years show that over 20,000 claims annually, if not more are filed by firms just like yours. And as a note from our view in the trenches, all of those firms still view that tax credit claim as a key, if not a major source of financing for their firm. It's the private companies in the SME ( small to medium enterprise ) sector that file the majority of those claims. For more info on the dollars invested by the government in SRED click here.

That cash flow, when received allows them to do a number of things, including furthering additional R&D, starting or furthering revenue and marketing, and by virtue of that SR&ED work maintaining their particular dominance in their niche. The program has been around for over 30 years now and understanding the rules and the 'culture' around SR&ED is important.

Again, we'll leave that to the experts, pundits, and oh my god the politicians to assess the benefits and historical culture/perspective around SR&ED - We'll focus instead on the monetizing of those claims into real cash flow and working capital.

WHY SR&ED FINANCING VIA A SR&ED LOAN

If your company has address technological challenges and invested in R&D and has filed a SRED claim you are eligible for SR&ED funding. Your SRED financing can take one of two forms in Canada.

You can cash flow your claim anytime immediately after you file it, or alternatively (with a bit of a track record behind you) you can finance your claim on an accrual basis. The accrual concept is becoming increasingly popular as it simply fast tracks cash flow re your R&D capital spend.

In essence, you're recovering a portion of your R&D as you spend on it. That's a solid business premise as most Canadian business owners and financial managers would agree. SRED finance is agnostic to who prepares your claim, if, and it's a pretty basic if, your claim is prepared by a bona fide SR&ED consultant with some level of credentials and expertise. As the majority of SRED consultants seem to work on contingency naturally they are in some ways more at risk than your firm, so it's quite easy via references to find a suitable party to submit your claim.

It's these consultants that address key issues such as technical policies, claim eligibility, expenditures qualifying, etc. Looking for something simpler in the whole SR&ED process? The actual financing of your tax credit! Simple, as we stated. We explain to clients that they should view the process as a standard business application that is secured by the tax credit claim itself.

 

 

HOW DOES SRED FINANCING AND THE ' SR&ED ' LOAN R&D TAX CREDIT WORK? 

Other key aspects of SRED financing? The basics are as follows: 70% loan to value funding for your filed claim. Typically no payments are made during the duration of the loan, and final adjustments are made at government finalization, returning to your firm the balance of 30% less financing costs. Accrual financing for your tax credit claim might be funded at a lower loan to value.

 SR&ED Eligibility - Does your Canadian company qualify for an SR&ED claim? 

KEY FACTS ABOUT THE SR&ED PROGRAM

1. Almost any company can participate in the program - Scientific, medical, technological industries all participate. As long as your work is under eligibility criteria you will be allowed a claim and refund.
2. The program is all about advancing scientific and business knowledge and improving on those processes and products we mentioned previously
3. Many businesses are surprised to hear that the research you do does not ultimately have to be successful ( hopefully it will be ) so success is not part of your refund eligibility
4. Companies, with the help of their SRED CONSULTANT, have to only show their work in enhancing current knowledge levels and how they undertook to face technological challenges
5. At 7 Park Avenue Financial, we work with many firms that file year after year, as well as first-time applicants. Even firms that have filed unsuccessfully in the past can file.

CONCLUSION - SRED FUNDING

Your company should consider the SRED program and financing your claim if you want your firms share of the Billions of dollars that the government pays out annually. In fact, well over 20,000 companies in Canada participate in the program every year! At 7 Park Avenue Financial, we tell clients that the SR&ED program, along with the GOVERNMENT OF CANADA SMALL BUSINESS LOAN program are two of the best government-related programs in business.

The Canada  Government guaranteed loan program is often called the 'SBL LOAN' while SR&ED refers to sr&ed refundable tax credits that can be also financed to accelerate cash flow.

Speak to a trusted, credible, and experienced Canadian business financing advisor and sr ed finance consultant who can assist you with your tax credit finance loan today. Think of that person as part of your total SR&ED process!  Talk to us about Sred financing tax credit sr ed finance consultant implications for your firm.

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



Stan Prokop 7 Park Avenue Financial/Copyright/2020

SR&ED FINANCING TAX CREDIT LOAN VIA A SRED FINANCE CONSULTANT

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

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

We Think So And Here's Why

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

Not everyone Canadian business owner or financial manager takes advantage of the Canadian Governments SR & ED (Scientific Research & Experimental Development) tax credit program. It's clearly in our opinion of the best and truly legitimate and valuable programs that a government provides for its business entrepreneurs in Canada.

Many, when they hear of the program for the first, are amazed that they can receive significant funds, that are non - repayable (yes that's non -repayable!) for their ongoing investment in research, product development, business processes, etc.

And, those that do take advantage of the program dutifully wait many months, in some cases a year or so or more for their cheques from the provincial and federal government.

Why not borrow against these funds and utilize those funds for much needed working capital and cash flow to further fuel the growth of your firm.

SR & ED financing is still relatively unknown in Canada - it is clearly a very specialized type of financing, somewhat 'boutique' let us say, in nature.

The government, via the program, wants to provide funds to Canadian business so they can continue to further their research and development and provide Canadian firms with a lead in technology and business.

So lets get back to the financing of the SR ED, aka ' SHRED ', aka 'SR &ED'. SR ED Loans are typically for approximately 70% of your combined federal and provincial claim. The claim can be financed as soon as you have formally filed the claim with the government, which is at the same time you do your year end tax filing.

SR ED applications can be filed for the last two years, so on occasion your firm might in fact have a significant receivable generated by virtue of that filing you have done. Our observation is that some companies actually book that receivable in their financial statements for the full amount of the claim. Some companies take the conservative approach and only record the cash coming in when it is received from the government.

So, you as a business owner or financial manager of a Canadian company are asking yourself the obviously - if I book the SR ED as an account receivable, will my bank provide financing for it. Our experience is generally 'no 'they will not. Canadian chartered banks, being somewhat more conservative in nature, recognize the SR ED claim may or may not be approved. So if there is any risk in your financial structure as viewed by the bank they will not advance funds.

The private sector of Canadian finance is in fact doing the SR ED financing. Claims are financed on the basis of your firms overall financial status, although we add that even pre revenue companies or companies that are losing money can still obtain SR ED financing.

Every Canadian firm that files a SR ED claim should consider financing the claim if they feel the additional cash flow and working capital will assist their company in continued growth and success. Talk to an expert and use this alternative financing as a great way to boost cash flow.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :

http://www.7parkavenuefinancial.com


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

Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

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

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


Stan Prokop

Funding SRED Refundable Credits Via SR ED Loans: Taking Sr&ed To A Whole New Level !

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This Just In – SR&ED Financing Is Not A Long Shot !

OVERVIEW - Information on financing SR&ED refundable tax credits in Canada. Key elements of the value of SR ED loans via SRED finance are discussed. Companies looking to monetize r&d capital investment should consider sr&ed financing

SR&ED financing does absolutely not have to be a long shot. In fact preparing and submitting your R&D claim properly helps to almost guarantee your claim can be financed via a SR ED bridge loan. Let's dig in.

It certain though that the general debate about the economic values of the program rages on. Recent major editorials in Canada's business press focus on the issues and questions. In a nutshell:

- inability of Canadian firms to maintain competitiveness
- lack of products being taken to full market potential
- improper alignment of federal and provincial resources

And on it goes!!! We have to love those govt and economics folks; we'll continue quietly toiling away in the real world helping those 18,000 + claimants of the program who benefit from billions in refunds from federal/prov authorities.

We'll let other debate these issues, notwithstanding their importance, ad nauseum . Our goal - effective SRED funding that speeds up cash flow recovery for your R&D capital investment.

Cash flow from SR&ED factoring (i.e. monetizing your claim) means different things to different types of firms. Many ' start ups' we work with use sr&ed financing in some cases as their most critical source of cash during their early development. Other firms of course simply take advantage of the program for reasons as simple as cash flow mgmt.

Not everyone knows that even publicly traded companies can actual benefit from refundable tax credit for the provincial portion of their claim - those claims are 100% financeable!

How then does the SR&ED loan work? It certainly helps to ensure that your claim follows the proper admin and filing guidelines under the program. The vast majority of claims are prepared by qualified SR ED consultants. Aligning yourself with a reputable consultant allows you to help insure the integrity of your claim. Most of these folks work on contingency so their work and reputation is at risk also, as well as minimizing your upfront investment in claim prep and filing.

Tax credit loans for SRED are funded at 70% of the total value of the claim, and no monthly payments are made during the duration of the loan, which is usual sometime within a 12 month period. The entire loan funding process can usually happen with a couple weeks -start to finish.

If you're looking to monetize your Sred claim seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can outline the benefits of sr ed loans for your company .



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com


7 Park Avenue Financial

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

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

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


Stan Prokop