A Not So Deep Dive Into SR&ED Financing In Canada
OVERVIEW – Information on SR&ED tax credit loan finance solutions . Monetizing SRED claims creates cash flow now , instead of waiting for your refundable SR ED claim to be approved and funded by the government
SRED (SR&ED) tax credit loan finance brings ' closure ‘(and a positive one at that) to the Canadian governments SR ED refundable tax credit program. When it comes to financing your claim the good news is that a not so deep ' dive' is required into what some mistakenly think is govt bureaucracy. Let's dig in.
The numerous changes in the Canadian SR&ED R&D program in Canada might leave some owners wondering: ' Can I still finance our claim? ‘The answer is an resounding ' Yes you can' as not only have R&D tax credit financing stayed the same outside the program changes ... it has in fact some enhanced financing mechanisms.
Business owners and financial managers that take advantage of the program (thousands of firms file and receive Billions in cheque refunds) still tend to take advantage of the fairly well known model of ' contingency fees ‘ which eliminate pretty well all the risk , and time, in preparing their claim
While the government chose not to ' regulate ' fees charged by SR&ED consultants we can only assume the new disclosure rules made cost of preparing claims more competitive, thus lower! Full disclosure seems to always keep business people more honest and open!
The whole issue of SR&ED consultants and who prepares your claim, as well as its financeability is worth tabling here. While any SR ED credit can be financed over time reputable consultants have provided a stronger level of comfort for any claim financed. There is some discussion in the industry by the way that claims filed without a consultant preparation are in fact more subject to audits -therefore delays in approval and refund.
But be clear that the smaller number of firms that complete their own claims can still finance the credit - and it helps more if they have a history of doing their own claims. However, bottom line is that ANY SRED tax credit is financeable, before filing, during filing, and after filing. In some cases any opinion letter might be required, but that is not the norm and more rare.
Back to the financing of your claim. Looking for some real ' bottom line ' on a SR&ED Loan? Here than are the facts:
- Any firm, at any stage, pre revenue or otherwise can finance their SR&ED claim
- A potential ' audit ' of your claim does not really affect the financing
- While the fed/prov. govt's have scaled back some of the refund percentages that has nothing to do with financing your claim or the amount you will receive under the tax credit loan
- Any claim in any amt. can be financed - At a certain point claims under 50-60k range don't have the right economics for financing but claims well p to 1,000,000.00$ and over can be financed
Cash flow is a required ' tool ' for any business - financing your SR ED tax credit allows you to monetize your claim. Claims are financed at 70% loan to value and are set up as a bridge loan with no payments being made during the term of the loan. A claim can be financed prior to filing, and next years claim work can also be preliminarily financed.
If you're looking for ' closure '
Stan Prokop - 7 Park Avenue Financial :
http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :
7 PARK AVENUE FINANCIAL = CANADIAN SR&ED TAX CREDIT FINANCING EXPERTISE
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Email = sprokop@7parkavenuefinancial.com
' Canadian Business Financing With The Intelligent Use Of Experience '
Stan Prokop
