Guide To Best Sred Credit Financing - Tax credit loans via a sr ed loan In Canada

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SR&ED FUNDING & FINANCE - FINANCING YOUR REFUNDABLE TAX CREDITS

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 and working capital benefits that come with an SR&ED loan via the refundable tax credit program. It's about encouraging businesses to better cash management 101, while at the same time retaining ownership of your business in the early stages!

We're examining why tax incentive sr&ed credit loans work to allow you to access capital! Let's dig in!

WHY SRE&ED FUNDING / SR&ED Tax Credit Loans

SR&ED Debt Finance provides the opportunity for businesses to access their future SR&ED refundable tax credit in advance. The Sred tax credits are treated as receivables and provided with funding facilities vis a term loan structure, without any monthly payments via the credits under the incentive program. Sr ed is even more cost effective by financing your claim in advance of filing.

What Is The R&D Tax Credit

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

SR&ED financing is a valuable tool for businesses of any size. By using this type of tax-advantaged financing, companies can free up cash flow that they would have otherwise spent on employee salaries or purchasing materials and equipment with no immediate return - instead investing in other areas which will generate stronger returns over time!

GROWTH FUNDING & SR&ED FINANCING SOLUTIONS

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 an SR ED financing 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 an SRED claim you certainly can’t finance one. The Canadian government both federally and provincially reimburses billions of dollars annually to Canadian businesses in all industries. A few industries seem more tailor-made than others for SRED claims, for example, Software and information technology.

The SR&ED program certainly doesn't discriminate against 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 an '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.

Recent 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 you can finance under 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 form 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.

What Are The Requirements For A SR&ED tax credit loan?

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 documented, prepared by a credible third party, and fast-tracked into the ‘non audit‘ 75% of all claims 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.

LET THE 7 PARK AVENUE FINANCIAL TEAM ACCELERATE THE FUNDING TIMELINE

The SR&ED Loan application process? It couldn't be simpler for Canadian companies. 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 completed financing is typically a few weeks from 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!

CONCLUSION - SR&ED TAX CREDIT ELIGIBILITY FINANCE

In summary, that 'slim chance' of a prompt cash refund can be significantly enhanced via SR&ED claim financing done efficiently and promptly. Speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your refundable tax credit funding needs allowing you new access to growth funding initiatives via the strategic capital accessed under the SR&ED loan - Let our team help you with your steps to tax credit and grant financing growth initiatives for the innovation your company strives for.

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

Is Sred a tax credit?

What is Sred financing?

Is Sred a government grant?

What qualifies for Sred?

A company that qualifies for SR&ED program tax incentives must be able to demonstrate the technical challenges they face and that the work they are doing in the r&d area is focused on the advancement of scientific or technical knowledge in science and technology. Efforts by a business to reduce or eliminate uncertainty should be focused on scientific or technological advancement! Typically a SRED consultant, an experienced third party will ensure the proper sr&ed tax credit calculation and to legitimately increase claim size for a more cost-effective claim - Claims are filed at the fiscal year end.

The purpose of work a company does work under the SRED program must be to generate or discover knowledge that advances our understanding in science and technology.The definition of SR&ED is so broad, and it can therefore be applied to any project that advances science and technoloWhat is IRAP funding?

What is the IRAP Program

The Industrial Research Assistance Program offers Canadian small and medium-sized enterprises access to 60%-80% of their internal technical labour expenses, as well as subcontractor costs.IRAP is a program that helps Canadian SMEs increase their innovation capacity and take ideas to market. The government investment into a company's internal technical labour expenses as well as subcontractor costs can amount to a significant portion of the research and development.

' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil

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MONETIZE YOUR SR ED TAX CREDIT FOR CASH FLOW