SRED Credit Financing In Canada : Moving Cash Flow Success From ‘ Slim Chance’ To Success Via Tax Credit Loans: SR ED Loan 101

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Need A Better R&D Capital Investment Strategy? Consider SR&ED Loans As A Faster Cash Recovery Alternative

OVERVIEW – Information on sred credit financing in Canada. A Sred Loan Accelerates Your R&D Capital Investment ! Here’s Why Tax Credit Loans Make Sense

SRED Credit financing in Canada continues to be a strategic way in which your firm can stay competitive and at the same time take advantage of the cash flow financing benefits that come with a SR&ED loan. We're examining why tax credit loans work! Let's dig in.

While pretty well everyone agrees the Canadian R&D capital refundable tax credit is one of Canada's best programs for maximizing research and development incentives it's unclear that the advantages of a SR&ED are fully understood.


Not only is the program applicable to almost every industry in Canada, but at the same time business owners and financial managers can compound the power of this program by financing your claim via a Sred loan. The key benefit of that loan? Cash for your SR ED claim now!

Let’s recap some of the key aspects of the program as they relate to your ability to monetize ‘your tax credit into real cash flow and working capital now. Also, let’s recap and focus on some current issues in your ability to access and maximize your SRED claim.

If you aren’t filing a Sred claim you certainly can’t finance one. The Canadian government, both federally and provincially reimburse billions of dollars annually to Canadian business in all industries. A few industries seem more tailors made than others for SRED claims, example: Software and information technology.

The SR&ED program certainly doesn't discriminate on any one industry .Your firm can be a commercial bakery, a sign company, a biotech firm, a software development company, or an industrial manufacturer. Bottom line? Every industry is eligible in some manner.

Your claim of course needs to be prepared by a knowledgeable third party. In Canada this essentially is an accountant who is proficient in SRED or a third party commonly called a 'SRED consultant’. Typically, but not always, the consultant you engage will be a specialist in your industry. That's a plus of course but the reality is that even if your firm is preparing your own claim (rare but possible) it can still be financed, although the claim will be subject to some form of due diligence no doubt.

Recently changes in the entire SR&ED process can both help and hinder your firm in maximizing your total sred credit. Naturally the larger the claims the more amount of cash that you can finance under a tax credit financing.

Canada Revenue Agency has clearly focused on streamlining the program - forms are found online at the government website, and in some cases have dramatically been simplified. For example, the new online from limits the overall technical description of our claim to only 1400 words.

In general almost 75% of claims are not fully audited, and are therefore approved and somewhat fast tracked for refund.

How do some of the new forms and rules affect your ability to finance your claim? When it comes to financing your sred claim it is critical to work with an experienced, credible, and trusted third party. Claims are generally financed at 70% of their overall value. Therefore your ability to have your claim fully document, prepared by a credible third party, and fast tracked into the ‘non audit ‘75% of all claim range is a solid sred financing strategy .

We referenced that claims are financed at 70%. That simply means that the larger your claim you can receive immediately, on financing approval .70 cents on the dollar for your claim. You of course still receive the rest of the claim, less financing costs, when your claim is approved and funded by Ottawa.

The SR&ED Loan application process? It couldn't be simpler. A basic application, which is of course supported by your actual technical claim. The sred loan is collateralized by your claim. Our own goal in a completed financing is typically a few weeks start to finish.

If you are filing sred claims in Canada you are among the 15% of businesses that are eligible for this refundable tax credit. Consider compounding the power of the program by financing your claim and accelerating cash flow. Why not compound the power of that government benefit. Cash via tax credit loans can be used for any corporate purpose - including accelerating next year’s research spend!

In summary, that ' slim chance ' of a prompt cash refund can be significantly enhanced via SR&ED financing done efficiently and promptly. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your refundable tax credit funding needs.



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

How To Finance Tax Credit Loans In Canada . SR ED Financing Via A ‘ SRED ‘ Bridge Loan.. Works!

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Everything You Should Know About Financing SR&ED Claims in Canada – More Exciting Than The History Of The Pencil!

OVERVIEW – Information on tax credit loans in Canada. SR&ED bridge loans monetize your refundable ‘ SRED’ tax credits , ensuring instant cash flow for your R&D Capital investment

Tax credit loans, especially a SRED loan under Canada's SR&ED program are arguably one of the best uses (maybe 'the best ‘? ) of the Canadian SR&ED program administered by Ottawa and the provinces. It's a solid way to more quickly recover on your firms r&d investment. Let's dig in.

Our view on SRED loans is pretty simple - it's a way to ' supercharge' your SR ED claim - generating an instant ' cash back '! The reality is that if you have filed a SR ED claim now you can immediately convert that claim into cash flow and working capital now for your business.
To us that's even more exciting than say... the history of the pencil! (In the mid-16th century, a storm uprooted a tree in England's Lake District. Clinging to the tree's roots was a shiny black substance - graphite! We don't know how much truth there is to that story, but we do know that just a few decades later, the site had been transformed into the first commercial graphite mine.

It's also not a secret why thousands of Canadian businesses utilize the program - it allows firms to stay competitive in today's ultra competitive environment - it's not secret everyone’s going global as an example.

In talking to clients we get two constant questions in the area of ' SR&ED"

" Why should we financing our SR ED claim
" How do we finance that claim?

Your firm’s ability to utilize a SRED bridge loan to inject working capital into your business is clearly the key advantage. Remember also that financing your claim is not the process of taking on more debt; you are simply cash flowing or monetizing that SR ED receivable now, in an effort to use that capital to continue and grow your business. Many firms we work with consider their SR ED claim as the largest receivable they will have that year.

We hear ' timing is everything'. If you have filed a first time SR ED claims it certainly would not be out of line to say that you might have to wait close to a year for your funds. Remember of course those funds are non - repayable. So if you have cash coming a year from now why, and its non repayable, why wouldn't you consider financing your claim and putting that cash to work now.

How do businesses typically use the proceed of their Sred loans? Most common uses include, but are not limited to:

" Reduce payables
" Purchase new equipment
" Invest in marketing
" Start your new Sr ed process for the next fiscal year

The reality is that its company's funds use them as you would another other injection of working capital. AKA ' any general corporate purpose'!

How are claims financed? The process, with an expert in tow, is simple. It involves a basic business application, the usual due diligence around any type of financing (info on your company, owners, etc) and the documentations that collateralized the SR ED into an asset to be financed.

To say that sred financing is a boutique and niche industry would be an understatement. Would you consider entering into a new business without the benefit of working with an expert? We don't think so, so seek out a trusted, credible and experienced advisor in your area to maximize your Sr Ed loan.
Finance loan amounts are typically in the 70% range of your total federal and provincial claim. Sr Ed is a national program and your sred claims can be financed in any province in Canada.

In summary, business owners should avail themselves of the SR ED program. They should also consider financing their claim which allows them to inject working capital immediately into their firm. Speak to an experienced credible advisor in the area and maximize the benefits of this great Canadian program.


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

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

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

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


Stan Prokop

SR&ED Financing Helps Eliminate Your Innovation Rut ! SR ED Refundable Tax Credit Loans In Canada

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The Harsh Truth About R&D Capital Investment In Canada ! A large part of your investment is refundable!

Information on SR&ED Loans In Canada. Financing  SR ED credits monetizes and cash flows your R&D capital investment. Here's why and how to finance  refundable tax credits

Sr&ed Factoring, or in effect the financing of your Canadian SRED claim is a unique and innovation method of financing your tax credit. For many Canadian business owners and financial managers the amount that their company has invested in research and development of innovative products and services represents a significant amount of their budgets.

Naturally Canadian business appreciates the amount of funds that the Canadian government refunds as non-repayable cash grant for your firms investment into product and technology advancement.

When we meet with customers who wish to finance, (factor) their SR&ED claim it's all about timing. They want to get the immediate benefit of that cash flow and working capital back into their firm. The financing of the claim is the way to do that - it's a case of immediately receiving the cash refund for your claim as opposed to having to wait anywhere from several months to a year to get the refund. And if your firm is filing a SrEd claim for the allowable period of two years prior well that cash flow and working capital has now doubled and provides a significant amount of cash flow if you finance the claim today.

As we have stated the whole scenario of financing a Sr&Ed Tax credit is essentially the process of factoring, or 'discounting the claim '. We would point out that the whole process is applicable to film tax credits also, which a growing and robust industry is given that the government has heightened its grants in many areas of film tax credit financing.

So whats involved in monetizing your SR&ED claim? And perhaps as important, what amount of funds can you get today for the claim. We have stated the claim is discounted or factored - business factor because they need immediate access to cash when current assets such as accounts receivable cannot provide cash flow in a manner that allows your firm to have the working capital it needs. In some cases the factoring of receivables or a SR&ED claim may be one options for cash flow generation, however in a great deal of the cases it in fact is the only option. That is because Canadian banks are reluctant to finance SR&ED claims because of the partial uncertainty in the final approval of the claim, and the reality is that many Canadian small and medium companies currently are challenged in obtaining all the business financing they need.

How much can I get? Is the typical question asked by Canadian business when financing their SR&ED claim? The answer is typically 70% now, and generally financing is structured along the lines of no principal or interest payments on the SRED loan financing until the government approves and funds the claim. At that point your firm gets the additional 30% of the claim, less financing costs associated with the claim which vary based on size of claim, overall financial situation of your firm, etc.

We want to clearly point out that no company should be deterred from financing a claim because they are in a pre- revenue state, or if they have other financial problems or challenges, as the essential security of your SR&ED itself is the prime collateral for the financing.

Talk to an expert in SR&ED financing and determine if you're a solid candidate for immediate cash flow and working capital via this great Canadian government program.

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

Article Source: http://EzineArticles.com/4007082



Here's a recent article published in the National Post on the important of innovation and r&d investments

TORONTO — Finance Minister Bill Morneau is calling on the country’s businesses to put more money into research and development.

In a speech to Toronto’s business community Friday, Morneau touted the benefits of R&D investment.

“The public sector needs to work together with the private sector to create the conditions for success for all,” he said. “But I’ll say here, that we need to do more. Business investment in research and development is absolutely paramount to our success and I’m calling on you, as well as business leaders across the country, to work with us as we take on this challenge.”

The speech follows the unveiling of the federal budget last month, which included billions in new stimulus spending and new funding for R&D. The latter was part of what the Liberals are calling their Innovation Agenda.

New spending on innovation will include $2 billion to expand research at universities, $800 million to develop regional clusters and $95 million annually for research grant councils.

Earlier in the week, Morneau spoke at Waterloo, Ont., a city he highlighted as a model that Canada can build on. Waterloo is known for its strong concentration of technology companies and is often compared in Canada’s media to Silicon Valley.

“We’re working with stakeholders to identify and build on regional strengths in the country,” Morneau said in his speech, part of a breakfast event put on by the Canadian Club of Toronto and the Empire of Canada..

In addition to R&D, Morneau talked about the importance of infrastructure funding. He told the audience that Toronto was eligible for a portion of the $3.4 billion in new spending on transportation. The Liberals have already said that $1.49 billion in spending will go toward Ontario’s transportation needs. SOURCE - NATIONAL POST - APRIL 2016




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

R & D SRED Financing In Canada : How To Finance Via A SR ED Loan

Is R&D Cash Your Obstacle To Innovation ? It Was.. Until Now ! Here’s Why .. and How

OVERVIEW – Information in sr&ed loans in Canada. R and D financing via a sred loan delivers on returning your capital quickly and maximizes your cash flow investment in the SR ED program . Here’s why and how

R & D Capital needs ? 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 . So don’t let lack of funds be your ‘ obstacle to innovation ‘ . Let’s dig in .


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. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can show you how to Talk to an expert use this alternative financing as a great way to boost cash flow.


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

SR ED Tax Credit Financing In Canada Solves A Problem : Here’s How A SRED Loan Does That

SR&ED Tax Credit Financing - 5 Things You Need To Know

OVERVIEW – Information on SR ED tax credit financing in Canada . Demystifying cash flowing your SRED claim – its not as complicated as you might think . A SRED loan monetizes tax credits and provides valuable cash flow and working capital to your business




SR&ED Tax Credit Financing allows the Canadian business owner and financial manager to take advantage of Canada’s SR&ED (also pronounced sred) program for tax credits. The most obvious benefit of this program is that monies advanced to your firm are in the form of a non repayable grant. We tell clients you can’t get any closer to the concept of ‘free money’ in Canadian business that the SRED program.
Did you also know that you can turn that ‘grant receivable’ into a sred loan as soon as you file your claim – in fact in some cases with the right information you can generate funds even before you file!

Let’s explore 5 Key Things you need to know about SRED Finance

1. It’s a specialized finance – more on that later

2. If you have a claim you can finance a claim – it’s as simple as that

3. You can generate approximately 70% of the total value of your sred claim (combined federal and provincial portions) as immediate cash flow under a Sr&Ed financing or a sred factoring scenario

4. The time to complete a sred financing is usually three to four weeks – the sooner you start and plan the better

5. SR&ED Tax credit financing does not add debt to your balance sheet – your financing is collateralized by the sred itself

Let’s clarify all those additional points in more detail so you can be well equipped and informed to consider a sred financing.

A sred loan is clearly something that anyone outside of the sred environment hasn’t even heard of - and for the portion of Canadian business that does take advantage of sred claims we can assure you a good portion of that business population doesn’t even know you can finance of ‘ discount ‘ your claims . It’s more or less like selling a receivable that is due your firm –you are simply receiving the cash now.

In Point # 1 we talked about sred finance being specialized – you should clearly seek out and speak to a sred business financing advisor. That will allow you to understand the basics, determine how much you can receive based on claim value, and work through a basic application to get your transaction financing.

A Sred loan should be really just viewed the same as any other business financing – getting back the usual application forms and our clients quickly understand that the essence of the financing doesn’t necessarily revolve around rations, covenants, outside collateral , etc, but in fact focuses on one item –your Sr&Ed claim itself .

Point # 2 revolves around the financing of your actual claim. Any claim is financeable, but we caution client that this type of financing makes more sense when it involves a claim in excess of $ 200,000.00 – That should not deter smaller recipients, small claims can be filed, but in reality they make less economic sense for the lender .

In Point #3 we referenced 70% as a guideline for most of sred financing in Canada. So what about that other 30% - lets clarify that. Your firm is advance 70% of the claim on filing – the other 30% of course still belongs to you. That amount is more or less viewed as a ‘holdback’ which helps carry some of the financing costs, and also covers off any possible downward adjustments that Ottawa might make on our claim adjudication. As SRED participants know your claim is viewed from both a financial and technological point of view.

Point # 4 involves of course the favorite questions of most clients - how soon can we get the funding?! As we stated, with your full co operation on providing copies of your claim, info on who prepared it, as well as basis business financing application criteria, you can receive funds in two to three weeks. Most firms are pleased to know that sred financing in Canada does not involve ‘payments ‘on the loan.

Point # 5 - In some ways the term Sr&Ed loan is a misnomer because it is really the factoring or monetization of your Sr&Ed receivable .Therefore you simply receive the funds and financing costs are deducted from the back end when Ottawa processes your claim and cheque.

As we have already stated the sred tax credit financing does not impact your financial statements, other than of course allowing you to put to use valuable cash flow and working capital as a result of the financing.

Consider a sr&ed tax credit financing when it makes sense to access additional working capital and cash flow and when you don’t want to wait for your funds over a long period of time! Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in monetizing tax credit claims under this popular program that generates billions for your competitors .. and hopefully your firm!



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 Tax Credit Loan 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

Get the Most From Your SRED refundable credit – Financing Your SR ED claim with a SRED bridge loan

Of the many questions clients ask around the sr&ed (sred) program in Canada a typical one, actually two, is ' can we finance and our sred claim... and how is financing sr&ed grants done?'

Let's work through a short sred loan primer and cover off the basics, allowing you to better understand the potential benefits of financing your sred refundable credit, and , more importantly determining if it makes sense to finance that claim .

Sred calim percentages actually vary by provinces, because they are a combo grant that is administered and funded by both your province and Ottawa. While percentages of the amounts you receive might vary a bit between provinces for the purposes of our discussion we'll speak in general terms, because we are pretty sure you aren’t going to move your company location to increase your non repayable sred credit!.

Sred claims vary but in general they do not go much more than over a million dollars. You have the ability to finance your claim if it’s eligible. We will also mention that if your company is perfectly willing to wait for your cheque that’s a good thing also, it just seems to us that if you can put non repayable tax credits to work to generate additional revenue and profits, well... that is a good consideration of financing our sred refundable credit.

A key to financing your claim is the quality of your claim. Three types of preparers are out in the marketplace - your company itself can prepare the claim, your accountant can, or you can use an expert, otherwise known in the industry as a sred consultant. Theoretically all three parties could prepare a claim that is financeable, but the reality is that your sred finance firm leans more preferably to the utilization of a sred consultant. That's simply because expertise in an area such as an R&D overview submission seems to make the most sense.

The government pays out billions of dollars each year to firms such as yours - so filing a claim, and considering the financing of that claim can be a key part of your overall company cash flow.

If your claim is a first time claim, and is less than straight forward there is a strong possibility based on current sred trends that you could wait close to a year for your refund. So the question then becomes, could your firm utilize effectively a sred loan as a bridge type financing for additional cash flow and working capital.

If you are answering in the affirmative then it’s simply a case of working with a trusted, credible and experienced Canadian business financing advisor to fast track a sred financing. Typical sr&Ed loans take a couple weeks or so to process; it’s a basic business application, with your sred refundable credit collateralized. Advances on your claim are in the 70% range and are typically structured as no payments, with the final 30% due your firm, less financing charges, at the time of final disbursement from Ottawa and your province.

A short summary of our shared info is very simple - if you qualify for sred then clearly use the program - if you don’t you are missing out . Want to wait a year for your money... great, keep us posted, the chq is in the mail. Want additional working capital and cash flow today out of your non repayable sred credit, then consider the sred loan financing program today. It’s as simple as that.
--

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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sred_refundable_credit_financing_sr_ed_sred_loan.html

Is It Smart To Finance Your SR&ED TAX CREDIT via a Sred Loan ?

You decide. Does your firm want to consider the benefits of a SR&ED tax credit loan? If you participate in Canada's sr&Ed program you are immediately eligible to consider financing that claim. Lets looks at why that might make sense, what are some of the benefits of monetizing your sred grant, and, finally, how exactly do you do that?

Any firm that has filed a sred claim via their own preparation, the utilization of a sred consultant, or through the use of their accountant has probably quickly picked up that billions of dollars every year are allocated to this program.

By participating in the program your firm is eligible for the non repayable grant on which the entire program is based.

So you have filed a claim. You are now in the waiting game process, as your claim has to be acknowledged, audited, and then processed for a refund cheque. When we talk to clients about what they will use the funds for a number of scenarios emerge - some firms hire additional staff, others , not surprising re invest in the entire r&d process to maintain their competitive posture within their industry .

In sharing our information on our sred subject we are making the assumption your firm knows about and is maximizing the program. As a sr&Ed claimant your firm develops or improves existing products, develops new ones, or invested in various process improvements via a trial and error type scenario.

So where are we at - we've simply re enforced the fact that your firm is aware of the program, it participates, and, via your sred consultant or accountant you are maximizing your eligibility for the maximum refund possible.

Cash is king, and you have spent a lot of your cash on the actual R&D involved in the program. Your firm has the option of financing your credit, as soon as it is filed. Clients are often confused about the financing of their claim - basic questions always seem to be - how much does it cost, is my firm incurring debt that I do not necessarily want to take on, and how long the process takes to finance such a claim and whats involved.

Let’s cover off those key points, which should allow you determine if you should consider financing your claim. We'll also throw in a few tips around maximizing your financing should you choose to proceed.

SRED financing of your sr&Ed tax credit is somewhat of a boutique finance industry in Canada. It is very rare that your bank will finance the claim. We certainly don’t agree with that, because in effect it is an account receivable, and they do finance receivables, don’t they??! Anyway, your firm will have to have a strong borrowing relationship with a bank to finance your claim. The reality is that this type of financing is best and more quickly achieving via a sred financing specialist.

Rates for sred financing vary, and factors that affect the rate tend to be size of claim, your company's current financial position ( many sred claimants are early stage, pre revenue, etc ) , as well as the perceived quality of your claim .

A sred loan is not debt per se, that’s important to understand, you are simply monetizing, or ' cash flowing ' one of your receivables, in this case the sred . Sred loans are structured as no payment loans and the final financing charges are simply deducted from the final cheque you receive from our good friends in Ottawa.

Sred financings can be processed, and funded in as little as two weeks - very standard application paperwork is involved, and the main collateral is or courses the sred itself.

Here’s some final tips we promised - have your sred prepared by someone who knows what they are doing, sred consultants are the best in this area as they are specialized. Count on receiving at least a 70% advance on your claim. Also, did you know that under certain conditions your sred can be financed prior to filing?

We’ve e shared some tips and procedures that will allow you to consider financing your claim. If additional cash flow and working capital are important considerations speak to a trusted, credible, and experience business financing advisor to validate your sred loan options.

What If Your SR &ED Research Tax Credit Grant Could be Financed For Funding Today via a SRED Loan?

If your company is filing what is known as Scientific Research and Experimental Development Tax Credits, (SR & ED) your firm has expended significant funds on developing or improving products, processes, etc. Receiving that cheque from Ottawa is of course always a great thing, but why waits?

One of the smartest things you can do is to consider the financing of your claim – that can be done via a short term sred loan – we could almost call it a bridge financing loan for your sr&Ed claim. Why is that a good strategy? Well , one main reason might be that since the tax credit is in the form of a non repayable grant then receiving funding for it today , ( rather than several months or a year from now ) allow you to put that money back to work into your business . That valuable cash, which you have already spent, can be re directed to general working capital, further re investment in r&d, reduction of payables, investments in new equipment, well you get it, for an general worthwhile corporate purpose .

To finance your claim it only makes sense that, first of all, you are eligible, and that you have in fact filed the claim. Your claim is of course filed by yourself and your accountants at your fiscal year end, via policies developed by Canada Revenue. Each province might have a little different spin on the amount you can claim but the federal portion of the claim always stays the same.
When financing a SR and ED claim the lender pays careful attention to who prepared the claim for your firm. This is typically via what the industry calls a SRED consultant, who typically has expertise in one or a variety of industries, including such areas as computer science, technology, physics, chemistry, manufacturing, etc.

SR ED claims can be financed whether your claim is a first time claim, but the process often goes quicker and easier if you have filed successfully in the past. Our point is simply that you should not be deterred if in fact you are filing for the first time – however as a cautionary note you should note that more focus will probably be paid to the overall quality of the claim and who prepared it for your firm. You can actually claim for a 2 year period, i.e. your current year and the previous fiscal year.
Clearly most business owners and financial mangers who utilize the program recognize the tremendous benefit of increasing your overall return on R&D by filing a claim and recapturing your funds. And if you can utilize those funds sooner rather than later, why not consider financing, or in effect monetizing the claim.

Financing your SR and ED claim can of course assist in your overall cash flow and working capital position. Claims are generally financed at 70% of their filed value, that allows a 30% buffer in case adjustments are made to the claim , and , guess what, you make no payments on the sr ed loan . Funds you receive are netted out against the final cheque from Ottawa and your provincial jurisdiction when your claim is ultimately audited, approved, and funded.

Clients often ask how complex a sred loan is, and what the timing is to receive funds. With your full co operation funding can usually be done within a couple weeks of your application, and the reality is the sred funding is no different than any other business financing your might entertain. It’s that simply, you complete a standard business application, and at the same time provide details of your sr Ed claim which in effect is the collateral for the financing. You aren’t incurring debt, which is a relief to business owners; you are simply ‘monetizing ‘your asset, in the same manner as you would if you were financing a receivable .

Speak to a trusted, credible, and experienced advisor in sred loans, and determine the advantages of monetizing your sred claim into valuable cash flow and working capital. That’s solid use of one of Canada’s greatest programmes for industries of all type.
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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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/sr_ed_research_tax_credit_sred_loan_sr_ed_loan.html