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SR&ED Financing Still Works ! Here's Your How & Why
OVERVIEW – Information on SRED Financing in Canada. A tax credit loan for your r&d capital investment is a solid way to cash flow your research investment. Should you be talking to a SR ED finance consultant today?
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.
It also makes it even more important to realize the quicker and efficient cash recapture of your R&D capital investment via the help of a 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 an 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 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 .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.
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 simple 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.
Other key aspects of the 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.
Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your tax credit finance loan today. Think of that person as part of your total SR&ED process!
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 :
7 Park Avenue Financial
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
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
