YOUR COMPANY IS LOOKING FOR REFUNDABLE TAX CREDIT SR&ED FINANCING!
FINANCING YOUR SR ED TAX CREDIT / SR&ED CREDITS
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Financing & Cash flow are the biggest issues facing business today.
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avene Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Financing research and development (R&D) tax credits in Canada is really the end to a successful outcome of your SR&ED claim. There's been a healthy dose of ' no you can't ' when it comes to any program changes over the last several years. SRED Finance loans are the positive monetization of your claim - in effect, the easy part! Let's dig into CRA SRED!
ARE YOU KEEPING UP TO DATE ON CHANGES IN THE SR&ED R&D CREDIT
Most Canadian business owners and financial managers who participate in the program's benefits probably realize that for a program around close to 30 years, there were probably some ' Times They Are A Changing' ) that were due. (Apologies to Bob Dylan, who it turns out wasn’t writing about refundable tax credits) The program's formal name is the Scientific Research And Experimental Development Program - and Canada Revenue Agency CRA sponsors it.
THOUSANDS OF FIRMS STILL ACCESS SRED FUNDING
While top experts and pundits maintained the program was ' broken, 'it nevertheless continued to fund Billions of dollars every year for thousands of firms for their eligible expenditures in sr&ed r&d credits, enhancing their business prospects through research. Anything that involves both provincial and federal governments is, of course, going to evolve.
A SIMPLE ANSWER TO ' WHAT IS SR&ED '
Participants in the program, of course, know the basics - it's all about proving some technological advancement. Here it’s about documenting your spending on fixing ' uncertainty ' and trying to progress to ' technological advancement.’ You file your claim with the help of your accountant and sr&ed consultant at the end of your tax year with your regular filing. This tax incentive program is in conjunction with CRA income tax filings. It is a classic incentive program for businesses to invest in r&d capital for long-term growth while maintaining their industry's technological growth. Your claim may also be carried back to past years - check the details with your accounting team. Your tax return may be audited for the sr&ed portion of your applied research.
THE SRED BRIDGE LOAN
After your claim has been filed, you're in a strong position to... you guessed it... wait! That waiting can be eliminated by utilizing an SR ED bridge loan to monetize your filing, accessing your cash now... instead of weeks, months, or longer? Based upon whatever status your claim is in with Canada Revenue. In some cases, that, of course, might be financial or technical audit; in other cases, just the bureaucracy that comes with those nice folks in the government.
HOW DOES SR&ED FINANCING WORK? SR ED PROGRAM LOANS ARE EASY TO ACCESS VIA 7 PARK AVENUE FINANCIAL
How then does an SR&ED loan work? It could not be simpler, and in fact, we maintain that if there have been changes to the program's financing, they have all, n fact, been quite positive! SRED loans are financed as bridge loans. You receive 70% of the total value of the claim on approval of the loan. The key collateral of the loan is, as you might surmise, your SR ED r&d tax credit.
No payments are made for the duration of the loan. When claims are finally approved, you receive the balance immediately less financing costs: mezzanine in nature due to the risk profile of this type of financing.
Tax credits can be financed in every province, in Ontario, for example, its the ORTC - your Ontario research and development tax credit
CONCLUSION
Financing research and development tax credits is a pretty easy decision - it boils down to:
Do you need the cash today, and what use can be made of the funds? It's really the opportunity cost ' that you are looking at. Funds, of course, can be used for what the accountants call ' any general corporate purpose. ‘ That, of course, includes operating financing, purchasing new assets, or doing more R&D to further enhance eligibility for your refundable tax credit.
Oh, by the way, even next year's claim can be financed today if you have a track record or demonstrate a quality claim with your SR&ED consultant.
Looking to cash flow your research and experimental tax credit? Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your financing needs in research tax credits. It's the ' easy ' part of research. Canadian-controlled private corporations should ensure they investigate their eligibility for one of Canada's best tax credits to develop their products and services. Can you afford not to access the sr ed tax incentive in today's competitive economy?
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Stan Prokop
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