YOUR COMPANY IS LOOKING FOR SR&ED BRIDGE LOAN FINANCING!
SRED FUNDING FOR SR ED EXPENDITURES MAKES SENSE - HERE'S WHY!
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Financing & Cash flow are the biggest issues facing business today.
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FINANCING RESEARCH AND DEVELOPMENT ACTIVITY
Financing SR & ED Canada program claims in Canada comes with issues that can either slow down your claim or speed it up. Knowing what works and what doesn't in SRED CRA finance goes a long way towards a successful acceleration of R&D cash flow.
SR&ED Financing To Access Your Refund Before Filing & Auditing Of Your Claim
Let's dig in on your sr&ed guide to tax credit financing under the federal government of Canada's Scientific Research And Experimental Development ' Program, aka ' shred tax credit program Canada, 'via the Government of Canada! Canadian businesses that file claims received cash via refundable tax incentives around their work in scientific or technological advancement.
SRED Loans are non-dilutive debt financing for your sr ed work that help clients avoid a focus on additional equity that might be required to fund operations - this is especially important during the early stages of business growth in the development stage of a company. Many software firms fund their sr&ed claims as an example as they fund software development for their innovative applications. Accessing working capital without the need to give up any equity ownership in your firm is a valuable tool! A sr&ed claim is not a grant so your firm can monetize and cash flow sr&ed claims. Public companies can still claim sr&ed incentives, but claims are not in the form of a cash refund.
LET 7 PARK AVENUE FINANCIAL HELP YOU OVERCOME FINANCING YOUR SRED CLAIM UNDER THE SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT TAX INCENTIVE PROGRAM
As we've said, numerous obstacles exist in the SR&ED program that can hamper your ability to recover funds quickly for qualified sr ed expenditures. Having said that, doing certain things right can have the opposite effect - reversing the R and D development activity sr ed tax cash flow drain when you are successful with this type of funding and financing option.
GETTING UP TO SPEED ON SR&ED TAX CREDITS AND THE SRED BRIDGE LOAN PROCESS
Recent changes in the last couple of years really levelled the playing field regarding the SR ED refundable tax credit and the claim you file with your corporate income tax return. However, seen by some as a ' sred grant, 'in fact, it's a refundable tax credit. SRED eligibility comes down to the quality of your claim under government guidelines, helping you avoid audit risk for your eligible project.
THE ROLE OF YOUR SR&ED CONSULTANT IN THE RESEARCH AND DEVELOPMENT TAX CREDIT CANADA
Business owners certainly have the option of preparing their claim themselves - in fact, who better understands what they are trying to achieve in research and development than the business owner/manager themselves regarding your sr&ed eligible expenses? Consultants help establish work done under the CRA guidance around scientific or technological advancement
SR&ED FINANCING TIPS TO GET YOUR REFUNDnt
Yet, as in any ' government' program with some complexity attached to it, sometimes some experience is helpful. Enter the SRED consultant for the r&d tax credit Canada - someone who prepares and helps file your claim at tax return time.
As a financing tip, you should known consultants can be compensated on a strict ' fee ' basis. In most cases, they work on a contingency basis, ‘taking a percentage of the total amount recovered under the refundable tax credit program.
Your consultant's quality vis credibility and expertise play a key role in sr&ed financing. While the industry seems to have eliminated the ' bad actors,' the key point here is that a reputable consultant maximizes your claim and adds credibility to the CRA validation process around your claim - which in fact may include an audit and meeting with the CRA rep.
Preparing your claim yourself, of course, saves you a ton of money. At the same time, it also raises a flag to CRA SR&ED folks that your claim has the potential to be 'non-compliant to the rules of the program re-audit risk etc., while also potentially adding to processing time.
WHO PREPARES SR&ED REFUNDABLE CLAIMS FOR SR&ED CREDITS
We would add that even the large BIG 4 accounting firms in Canada all have active SR & ED practices in the investment tax credit area.
YOU CAN FINANCE A FIRST-TIME SRED REFUND!
PREPARING YOUR SRED BRIDGE LOAN APPLICATION - EASIER THAN YOU THINK
What government program isn’t associated with paperwork for any business opportunity ?! While that might be a ' myth vs. reality ' statement, the fact is that the govt has tried to streamline the program re online applications, initial screening to ensure validity, etc.
While we can go round and round on the merits of a good claim and who prepares it and how, at the end of the day, it's simply ensuring your claim is ' eligible ' and that you have the ' documentation' to back it up, accompanied with your income tax return.
EXAMPLE OF A SR&ED LOAN ON YOUR SR ED CLAIM REFUNDABLE INVESTMENT TAX CREDIT
As far as we're concerned, financing tax credits is easier than the time your sr&ed consultant spends writing one up for your eligible expenditure. Claims are financed uniquely - they are financed as ' bridge loans ' - providing you with funds for up to 70% of the combined value of your claim under a bridge financing mechanism.
No payments are made during the loan duration, and you receive the balance of funds from 'Canada Revenue Agency CRA' when your cash refund claim is approved, less financing costs that are mezzanine rates in nature. That's a solid cash flow solution.
In many cases, your firm can also set up an ongoing credit facility for your SR&ED financing for future claims, allowing you to access funds much earlier for a future government tax credit claim.
CONCLUSION - DO YOU QUALIFY FOR SR&ED FINANCE
Let your firm take advantage of the billions provided by the Canadian government under the SRED tax credit Program. Any firm involved in research and experiments for products and processes in healthcare, manufacturing, software development, the oil industry, food, etc can qualify. Any privately owned company can apply for a sred refund.
Credible firms with good claims can also take advantage of financing such as an SR&ED line of credit being put in place - as well; your next claim can start being financed now for qualified firms applying for the refundable tax credit - avoid long term debt via short-term loan.
PUT YOUR TAX CREDITS TO WORK TODAY
Learn how to finance your Scientific Research and Experimental Development (SR&ED) claims with 7 Park Avenue Financial. Our expert team can help you navigate the complex SR&ED program and secure funding for your R&D projects. From understanding eligibility criteria to assembling required documentation, we'll guide you through the entire SR&ED claim process and help you maximize your tax credit. Discover the advantages of working with 7 Park Avenue Financial and learn how we can help you grow your business through SR&ED funding."
While playing the waiting game for sr ed tax incentives might pay off in some form for the business owner, it doesn't when it comes to waiting for government cash, so seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help you cash flow your claim .. today.. and help maintain your status as an innovative company in Canada with a service offering for funding r&d that makes sense.
FAQ: FREQUENTLY ASKED QUESTIONS
What is SR&ED FINANCING?
SR&ED financing is a debt facility that allows you to access your r&d sr&ed refund before your claim is approved and funded by the federal and provincial governments. When an SR&ED credit line is accessed, you receive the funds before your claim is filed. You can access funding now versus waiting months for the CRA to process and fund your SRED claim - Companies file their claim in the fiscal tax year but sr&ed financing solutions allow you to receive cash ' on demand' for accrued sr&ed project systematic investigation work.
What can be claimed on SR&ED?
The Scientific Research and Experimental Development (SR&ED) program in Canada is an investment tax credit that allows businesses conducting r&d to claim categories of expenses such as salaries and wages and payments to subcontractors as well as materials and a percentage of overhead costs that the business incurs as they perform their work in attempting to solve scientific or technological uncertainty. Canadian-controlled private corporations who perform basic research around their sr ed projects become eligible for tax credits. In some cases, some capital expenditures might also be allowed. Canada Revenue Agency (CRA) defines eligibility under Canada's income tax act. A sr&ed refund is taxable income in the year it is received.
How do I file a claim with sr&ed?
To be eligible for sr&ed under the sr&ed program companies file a T6661 form in the year-end filing for the fiscal tax year. This form will include data from the company that supports sred eligibility as well as a technical narrative around the basic research that was conducted. Supporting data around expenses, and salaries pertaining to the sr ed project must be available to CRA- Canada Revenue Agenecy reviews and audits the claims if necessary and in some cases might request additional backup material Notice of assessment is issued by CRA which confirms the amount of the refundable tax credit. Companies have 18 months after a fiscal year end to file claims.
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