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SR&ED Loans - Financing Refundable Sred Credits In Canada
Sr&Ed Factoring – Cash & Working Now for your Canadian SRED Claim
YOUR COMPANY IS LOOKING FOR CANADIAN SR&ED CREDIT (SRED) FACTORING AND FINANCING FOR SR ED REFUNDS!
FINANCING SR&ED ELIGIBILITY FOR CANAD SRED TAX CREDITS IN CANADA
You've arrived at the right address Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses 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
UNDERSTANDING SR&ED TAX CREDIT FINANCING ELIGIBILITY
SR&ED Factoring , or in effect the financing of your Canadian SR&ED refund claim, is a unique and innovative method of financing your tax credit. For many Canadian business owners and financial managers, their company's amount invested in the research and development of innovative products and services represents a significant amount of their budgets.
What is SRED Financing?
Many Canadian companies and their business owners participating the in the SR&ED program are not aware that they have the ability to finance claims. their claims due from Canada Revenue Agency.
The SR&ED tax credit is a refundable tax credit and often appears as an intangible asset on a company's balance sheet and is shown as an account receivable of the business.
The majority of traditional financial institutions do not have the understanding to place a financeable value on refunds When we meet with customers who wish to finance, aka 'factor' their sr&ed claim it's all about timing - They want the immediate benefit of that cash flow and working capital back into their firm.
They want to get the immediate benefit of that cash flow and working capital back into their firm.
The term 'non-dilutive capital' is often used in the Sr&ed terminology - simply meaning that firms financing their SRED claims have a new level of flexibility which in many cases removes the necessity to have to consider new equity financing -
The ability to now plan cash injections around their work in SR ED tax credits can impact various sales and marketing initiatives positively, leading to higher valuations.
The financing of the sr ed investment tax credit claim is the way to do that – it’s a case of immediately receiving the cash refund for your sr ed tax incentives instead of having to wait anywhere from several months to a year to get the refund.
And if your firm is filing an SRED claim for the allowable period of two years prior, well, that cash flow and working capital have now doubled and provided a significant amount of cash flow if you finance the claim today.
As we have stated, the whole scenario of financing an SR&ED Tax credit is essentially the process of factoring or ‘discounting the claim.' We would point out that the whole process is applicable to film tax credits also, which a growing and robust industry is given that the government has heightened its grants in many areas of film tax credit financing.
So what's involved in monetizing your SR&ED claim?
And perhaps as important, what amount of funds can you get today for the claim?
We have stated the claim is discounted or factored - business factor because they need immediate access to cash when current assets such as accounts receivable cannot provide cash flow in a manner that allows your firm to have the working capital it needs. In some cases, the factoring of receivables or an SR&ED claim may be one option for cash flow generation, however in a great deal of the cases, it, in fact, is the only option.
That is because Canadian banks are reluctant to finance SR&ED claims because of the partial uncertainty in the final approval of the claim. The reality is that many Canadian small and medium companies are currently challenged in obtaining all the business financing they need.
How much can I get against my SR&ED as collateral?
Is the typical question asked by Canadian businesses when financing their SR&ED claim? The answer is typically 75% now. Generally, financing is structured along the lines of no principal or interest payments on the SRED loan financing until the government approves and funds the claim.
At that point, your firm gets the additional 30% of the claim, less the financing costs associated with the claim, which vary based on the size of the claim, the overall financial situation of your firm, etc.
Who qualified for SR&ED Financing?
We want to clearly point out that no company should be deterred from financing a claim because they are in a pre-revenue stage or have other financial problems or challenges, as the essential security of your SR&ED itself is the prime collateral for the financing. The use of a qualified sr&ed consultant always helps the financeablity of your claim.
CONCLUSION
Every business participating in qualifying for SR&ED credits should investigate the option of leveraging their claim into positive cash flow into the business - That cash advance against an already filed SRED or funding for accrued spending prior to filing does one thing - it accelerates the growth of your business.
While SR&ED finance solutions are typically a bridge loan against a filed Sred claim borrowers can now fund their accrued spending prior to filing - The time-worn saying that cash is king is so very applicable to the SR&ED process, allowing a company to factor their sred claim or fund accrued work at financing cost that makes sense for their sr ed project.
Talk to 7 Park Avenue Financial, an expert in SR&ED financing and determine if you’re a strong candidate for immediate cash flow and working capital via this great Canadian government program. If your business is sr ed eligible talk to our team about financing your claim.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
What is the SR&ED Program
The Scientific Research and Experimental Development program in Canada is a refundable investment tax credit incentive under the income tax act, via CRA, that helps businesses engaged in r&d for technological advancement or new processes. It is by far the largest business incentive program in Canada, providing in excess of 3 Billion dollars annually to allow businesses to offset their research and development costs - Both startup and mature companies conduct research and use the program on an annual basis, as claims are filed annually every tax fiscal year.
' Canadian Business Financing With The Intelligent Use Of Experience '
STAN PROKOP
7 Park Avenue Financial/Copyright/2024
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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