WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label tax loans. Show all posts
Showing posts with label tax loans. Show all posts

Sunday, January 15, 2023

Tax Credit Loans For SR&ED Credits In Canada: Finding Your Way In SR ED Financing





FUNDING YOUR REFUNDABLE TAX CREDIT SR ED CLAIM IN CANADA

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

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 - sprokop@7parkavenuefinancial.com

 

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

 

SR&ED FINANCING FOR R&D PROJECTS IN CANADA

 

 

SR&ED Debt Finance Loans In  Canada for SR&ED Tax Credits - Canada's R &D refundable credit system seems to pose challenges for some clients looking to monetize, via SR ED financing, their SR ED claims.

 

Does there have to be a problem? We don't think so.  Want to learn more about how you can fund your r&d and how sr&ed financing can revolutionize your r&d spending? Then let’s dig in!

 

 

 

UNDERSTANDING THE GOVERNMENT OF CANADA'S SR&ED PROGRAM  - HOW CAN SR&ED FINANCING HELP YOUR BUSINESS

 

Of course, SR&ED credits are available via the government's Scientific Research and Experimental Development Tax Credit program.  Although federal budgets in recent years have changed the program significantly from the viewpoint of streamlining the process, certain portions of the allowable refund were also cut back, i.e. capital expenditures relating to the actual R&D capital investments your company makes.

 

STRUGGLING TO FIND FUNDING FOR YOUR R&D 

 

The goal of  Industry Canada's SR&ED program is to reinforce the commitment of the government to support and motivate Canadian businesses to conduct r&d . That r&d  can come from many areas, including improving or inventing new products and processes or solving technical challenges in new or old technologies.

 

 

 

IS A SR&ED LOAN REALLY DEBT FINANCE? 

 

The term debt finance is really a misnomer, as no debt comes on the balance sheet when you monetize your sr ed claim via 7 Park Avenue Financial  - in effect you are financing an account receivable, with your client being the federal and provincial government - that receivable is turned into cash loan proceeds.

 

The irony of SR&ED is that many, in fact almost all banks don't recognize sr&ed receivables - they view your claim as an ' intangible asset ' or an unqualified asset  in many cases -  that might be partially understandable but certainly less so if your firm regularly files claims or has a claim prepared by a competent consultant - Larger SR&ED preparers are sometimes more than willing to provide opinion letters on the quality of the claim.

 

 

HOW CAN SRED FUNDING HELP YOUR BUSINESS 

Along the way, in the sr&ed process, your business is accruing  sr&ed  tax credits as you spend on materials and incur operating expenses on your r&d project/projects.  While Canada Revenue Agency has improved its commitment to review and audit ( if necessary)  claims the reality is that extended wait time can significantly impact a company's cash flow.

 

So how does the company secure funding for their claim while they are in the work and waiting process - The answer is sr&ed accrual loans which you can draw down regularly based on your cash flow needs and accrued spending.  That ' smoothing process' in your cash flow is a major financial benefit to any business, particularly early-stage firms, some of which are even in the pre-revenue stage.

 

Naturally monetizing your sred tax credit does not in any way dilute equity ownership - That allows the company to not have to take o more expensive financing that might be in the form of long-term debt or more expensive alternative financing such as short-term working capital loans, also known as  merchant cash advances/ 'mca's"

 

 

 

SR&ED FINANCING IS THE LOGICAL SOLUTION TO MORE EQUITY FINANCING - HERE'S WHY  

How does sred financing differ from other types of Canadian business financing?

 Debt financing is almost always a lower cost of funding a business versus owners having to give up additional equity - Even though loans or credit lines have interest rates and financing costs, new equity holders have a claim on the ownership of the business and all future profits.  Payments on loans are tax deductible, and the reality is that many firms working on r&d do not have the financial strength to successfully receive additional business financing - In a red loan the collateral of the loan, which is just a short term loan, is.. the SR&ED claim itself!

 

Companies do not have to be profitable in order to qualify for sred funding, and no personal guarantees are required. If your firm qualified for sred tax credits you are eligible to finance your claim - SRED financing for international r&d qualifies if the work is performed and funded in Canada under CRA guidelines. Sred financing is different from other grant and loan programs because it is a monetization of an asset and brings no long-term debt to the balance sheet - A common misconception about sred financing is that it is expensive but it is a low-cost business financing in a number of ways - Talk to the 7 Park Avenue Financial team about why sr&ed financing makes sense.

Companies can get 75% of their filed or accrued claim and claims can be funded in a matter of a couple of weeks - Very basic company info is required to apply, including information on your business and the actual claim.

   

Are there any difference between SR&ED and other governmental funding options? The other similarly large government funding solution is the Canada Small Business Financing Program, which is a lump sum term loan program which funds equipment, leasehold improvements, technology needs, as well as new changes ot the program which includes working capital and lines of credit - Talk to the 7 Park Avenue Financial team about SBL loans.

 

 

WHO PREPARES  SRED CLAIMS? WHAT IS THE ROLE OF THE SR&ED CONSULTANT?

 

In Canada, the majority of tax credits/claims are prepared by independent consultants - they are known as ' sr&ed consultants'.These sr ed claims are filed, of course, in conjunction with your year-end tax return.   Retaining a good preparer for your claim is one part of the financing process of a claim. In the past couple of years, a lot of focus was placed on the way consultants bill and prepare claims - the majority of which are on a ' contingency' basis, which in hindsight probably caused some bad behaviour by a small few.

 

There are many advantages to using a sr&ed consultant - they are typically very experienced in your industry and can propose the right strategy on filing a claim and what supporting material and write-up will be required to support the claim approval - Sred claims are typically positioned uniquely to each firm and its work in research and development and claims will reflect payroll records and purchase invoices and proofs of payment from the company accounting records.

 

While some consultants charge regular fees for their time and work many works on a contingency basis at competitive rates which furhter enhances their belief around the approval and credibility of your claim - Canada revenue agency reviewers are aware of the role of sr&ed consultants.

Because of the nature of the breadth of  r&d in the Canadian economy, many consultants specialize in  certain industries such as software development, agriculture, manufacturing, oil and gas and multimedia/

 

We encourage all clients to consider whether they are eligible for the SR&ED  refundable tax credit and focus on filing the claim promptly as there are some deadlines in place under the program.

 

 

BILLIONS OF DOLLARS ARE REFUNDED TO CANADIAN BUSINESSES ANNUALLY UNDER SRED 

 

Refundable credits return billions of dollars to Canadian corporations each year.  Your ability to cash flow or monetize your claim makes the program complete in some way. Your company is in effect ' fast-tracking ' the cash flow return to your company by filing and financing your claim.

 

WHAT TYPE OF COMPANIES CAN APPLY FOR SR&ED

 

The majority of businesses in Canada that apply for s&ed are private firms, aka ' Canadian-controlled private corporations (CCPCs)", but even foreign-owned firms that do the r&d in Canada are eligible - Applicants can also be proprietorships and partnerships.

 

 
HOW DOES A SR&ED BRIDGE LOAN WORK? 

 

How then are the claims financed? It certainly doesn't have to be problematic if you have some expertise backing the process.  A simple business application starts the whole process - typical info needed here is a copy of your claim, information on who prepared it, as well as your business financials.

 

As you are accruing your spending and qualifying for sr&ed tax credits you have the ability to accelerate funding of your claim, smoothing out the cash flow process and continuing to not have to consider alternative equity or long-term debt finance solutions. Business owners and financial manager can plan their accrual loan advances as they forecast their cash flow needs - as an example, a company can choose to access funding on a quarterly basis for example.

 

 

WHAT IS THE COLLATERAL REQUIRED FOR A SR&ED BRIDGE LOAN?  SPOILER ALERT - IT'S  YOUR SR&ED CLAIM!

 

We note here that many firms that complete claims range from start-ups to firms that are still in the early stages of revenue. So it's important to understand that the key collateral under SR&ED financing is in fact, just the claim itself. In effect, you've created a (government) account receivable and are only financing /monetizing that specific A/R.

 

 

 
CONSIDER A SR&ED CREDIT LINE TO PRE-FUND YOUR CLAIM 

 

The newest trend in tax loans for SR&ED financing is the ability of your business to, in effect, pre-finance your claim - you are reimbursed for funds you are spending during your spending. That fast tracks the return of R&D capital even faster. Talk to the 7 Park Avenue Financial team about how the process to get sred funding has never been faster

 

 

KEY TAKEAWAYS IN  SR&ED LOAN FINANCING 

 

Any business spending in r&d  is eligible to apply for sr&ed financing for their sr ed expenditures

Small businesses can apply for sr&ed refund also

Many firms applying for sred are startups or in pre-revenue, although medium size and larger firms also qualify for sr ed tax incentives

SR&ED loans are a financing option for the refundable tax credit

Almost every industry in Canada can qualify for r&d, including  IT and software development areas of the economy, biotech, manufacturing, oil and gas, and those focused on  the new economy such as carbon credits

 

 
 
CONCLUSION

 

  

Take your company to the next level by accessing sr&ed funding for r&d projects - Keep growing the value of your business and unlocking the full potential of your business's value!

 

Does your firm qualify for sr&ed finance? If your firm makes investments in research and development and if you're looking to avoid any ' problems ' associated with financing SRED CREDITS, seek out and speak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor at 7 Park Avenue Financial and let us help. Our specialty is helping you fund refundable tax credits -  The probable result is - Problems gone!

 

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION
 

 

What is the SR&ED Program In Canada

Formally called the  Scientific Research and Experimental Development (SR&ED) tax credit sr ed tax incentive for work done in the area of scientific or technological uncertainty delivers a refundable investment tax credit for companies who conduct research and perform basic research and systematic investigation for the purpose of scientific or technological advancement. In some cases, this might mean products for new or improved material during the tax year at which point eligible expenditures are filed by Canadian businesses under the reporting deadline. SR ED eligibility criteria are determined as set out by Canada Revenue Agency and there is income tax payable on the sr&ed claim.

 

Most companies will have third-party technical consultants called ' sred consultants' who determine eligible material costs as well as eligible salaries and subcontractor fees and overhead costs related specifically to the R&D project. There is a reporting deadline that is the same as the fiscal year tax filing. Canadian businesses can take advantage of SRED as well as other corporations that are foreign-owned.

 

Federal and provincial tax credits are combined under the Sr ed program to encourage Canadian businesses to perform r&d for innovation and advance scientific knowledge - Companies claiming Sr&ed must ensure their market research qualified for this tax incentive program and work is reviewed by financial reviewers at CRA under the income tax act in Canada. Companies that wish to finance sr&ed claims through commercial finance companies take advantage of non dilutive funding.

 

HOW CAN  A BUSINESS BENEFIT FROM SR&ED CREDITS

 

Companies performing r&d can claim a refundable investment tax credit for qualified sr ed projects and expenditures set out in the program via their sr ed project, regardless of whether the r&d was successful as a final outcome around the scientific knowledge the company was pursuing.

 

   

Monday, February 15, 2021

Tax Credit Loans For SR&ED Credits In Canada: Finding Your Way In SR ED Financing








What Seems To Be The Problem Here? SR&ED Tax Credit Financing Explained – Finally!


SR&ED Debt Finance Loans In  Canada for SR&ED Tax Credits - Canada's R &D refundable credit system seems to pose challenges for some clients looking to monetize, via SR ED financing, their SR ED claims. Does there have to be a problem? We don't think so. Let’s dig in.

 

UNDERSTANDING THE GOVERNMENT OF CANADA'S SR&ED PROGRAM  

Of course, SR&ED credits are available via the governments ' Scientific Research and Experimental Development Tax Credit program.  Although federal budgets in recent years have changed the program significantly from the viewpoint of streamlining the process, certain portions of the allowable refund were also cut back, i.e. capital expenditures relating to the actual R&D capital investments your company makes.

 

IS A SR&ED LOAN REALLY DEBT FINANCE? 

The term debt finance is really a misnomer, as no debt comes on the balance sheet when you monetize your sr ed claim via 7 Park Avenue Financial  - in effect you are financing an account receivable, with your client being the federal and provincial government - that receivable is turned into cash loan proceeds.

 

The irony of SR&ED is that many, in fact almost all banks don't recognize sr&ed receivables - they view your claim as an ' intangible asset ' in many cases which is partially understandable but certainly less so if your firm regularly files claims.

WHO PREPARES  SRED CLAIMS?

In Canada, the majority of tax credits/claims are prepared by independent consultants - they are known as ' sr&ed consultants'.These sr ed claims are filed, of course, in conjunction with your year-end tax return.   Retaining a good preparer for your claim is one part of the financing process of a claim. In the past couple of years, a lot of focus was placed on the way consultants bill and prepare claims - the majority of which are on a ' contingency' basis, which in hindsight probably caused some bad behaviour by a small few.

WATCH YOUR DEADLINES!

We encourage all clients to consider whether they are eligible for the SR&ED  refundable tax credit and focus on filing the claim promptly as there are some deadlines in place under the program.

 

BILLIONS OF DOLLARS ARE REFUNDED TO CANADIAN BUSINESS ANNUALLY UNDER SRED

 

Refundable credits return billions of dollars to Canadian corporations each year.  Your ability to cash flow or monetize your claim makes the program complete in some way. Your company is in effect ' fast-tracking ' the cash flow return to your company by filing and financing your claim.

 
HOW DOES A SR&ED BRIDGE LOAN WORK? 

How then are the claims financed? It certainly doesn't have to be problematic if you have some expertise backing the process.  A simple business application starts the whole process - typical info needed here is a copy of your claim, information on who prepared it, as well as your business financials.

 

WHAT IS THE COLLATERAL REQUIRED FOR A SR&ED BRIDGE LOAN?  SPOILER ALERT - IT'S  YOUR SR&ED CLAIM!

We note here that many firms that complete claims range from start-ups to firms that are still in the early stages of revenue. So it's important to understand that the key collateral under SR&ED financing is fact, just the claim itself. In effect, you've created a (government) account receivable and are only financing /monetizing that specific A/R.

 
CONSIDER A SR&ED CREDIT LINE TO PRE-FUND YOUR CLAIM 

The newest trend in tax loans for SR&ED financing is the ability of your business to, in effect, pre-finance your claim - you are reimbursed for funds you are spending during your spend. That fast tracks the return of R&D capital even faster.

 
CONCLUSION 

Does your firm qualify for sr&ed finance? If your firm makes investments in research and development and if you're looking to avoid any ' problems ' associated with financing SRED CREDITS, seek out and speak to a trusted, credible and experienced Canadian business financing advisor at 7 Park Avenue Financial and let us help. Our specialty is helping you fund refundable tax credits -  The probable result - Problems gone!



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.


' Canadian Business Financing With The Intelligent Use Of Experience '


ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

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 financing 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.


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




7 Park Avenue Financial/Copyright/2021

Wednesday, June 18, 2014

Tax Loans For SRED Credits In Canada : Finding Your Way In SR ED Financing






What Seems To Be The Problem Here? SR&ED Tax Credit Financing Explained – Finally !



OVERVIEW – Information on R and D tax credits in Canada . SRED Credits can be financed. Here’s how SR ED financing via tax loans works and why tax credit financing should be considered if you are filing these claims







Tax loans
in Canada for SRED Credits - Canada's R &D refundable credit system seems to pose challenges for some clients that are looking to monetize, via SR ED financing, their claims. Does there have to be a problem? We don't think so, let’s dig in.


SR&ED credits
are available, of course, via the governments ' Scientific Research and Experimental Development Tax Credit ' program. Although federal budgets in recent years have changed the program significantly from a view point of streamlining the process, certain portions of the allowable refund were also cut back, i.e. capital expenditures relating to the actual R&D.

In Canada the majority of tax credit claims are prepared by independent consultants. These claims are filed of course in conjunction with your year end tax return. Retaining a good preparer for your claim is one part of the financing process of a claim. In the past couple years a lot of focus was placed on the way consultants bill and prepare claims - the majority of which are on a ' contingency' basis which in hindsight probably caused some bad behavior by a small few.

We encourage all clients to both consider whether they are eligible for the SR&ED credit, as well as focusing on filing the claim promptly as there are some deadlines in place under the program


Refundable credits return billions of dollars to Canadian corporations each year. Your ability to cash flow or monetize your claim makes the program complete in some way. Your company is in effect ' fast tracking ' the return of cash flow to your company by filing and financing your claim.

How then are the claims financed? It certainly doesn't have to be problematic if you have some expertise backing the process. A simple business application starts the whole process - typical info needed here are a copy of your claim, info on who prepared it, as well as your business financials.

We note here that many firms that complete claims range from start ups to firms that are still in early stages of revenue. So it's important to understand that the key collateral under a SR ED financing is fact just the claim itself. In effect you've created a (government) account receivable and are simply financing /monetizing that specific A/R.

The newest trend in tax loans for SRED is the ability of your business to in effect pre-finance your claim - you are reimbursed for funds you are spending during your spend . That fast tracks the return of R&D capital even faster.

If you're looking to avoid any ' problems ' associated with financing SRED CREDITS seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
The probable result - Problem gone!



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 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 '