Looking To Side Step Waiting For Your SR&ED Claims ? Finance Them ! Here’s How

OVERVIEW – Information on SRED financing in Canada . Monetizing your SR&ED Research and Development Credit makes cash flow sense



SRED Financing in Canada is all about cash flowing/monetizing your SR&ED tax credit. It’s not unusual for business owners and financial managers that access this program to get the feeling their claim is on somewhat of a ‘ hiatus ‘ after they have filed their claim. Can things be ‘ speeded up ‘ a bit? They can! Let’s dig in.

While there might be some legitimate reasons for the actual time period from filing your claim to receiving your refund cheque from the government that’s little consolation to your business – a significant amount of time has lapsed since you’ve spent those funds, and you’re looking for ‘ cash back’ !

What are some of the reasons a claim is delayed or slowed down based on time to final approval and refund? They might include things such as the financial or technical audits done on your business and the claim. It might also simply be a ‘ backlog ‘ has occurred in volume of claims processing inside Canada Revenue Agency.

It should be no secret by now that there have been some major changes in the program. This includes a lot of scrutiny on those folks that prepare claims (aka ‘ SR&ED Consultants ‘) who created a feeding frenzy of sorts around the way they bill their fees on the processing of your claim. These fees typically were ‘ contingency fees ‘ meaning that the consultant bore the risk around the time and ultimate success of the claim, and for that charged a per cent age of final amount received.

SRED Financing allows for your research and development credit claim to be cash flowed, allowing you to purpose the funds for any general company purpose. This is even more critical to firms that are in development or pre revenue stages.

A handful of common sense strategies and enhance both the final approval of your claim, as well as it’s financing. They include:

1. Ensuring you are taking advantage of your positive SR&ED history – while claims for first time filers can be financed it goes without saying a track record in previous years sure helps the cause and speed of your approval

2. Ensuring your claim addresses some of the key ‘ true requirements ‘ of a claim such as your firm’s efforts to address uncertainty, advancement in processes, etc

3. A copy of your SR ED claim is always a key part of the financing of the claim – remember that the claim itself is the key ‘ collateral ‘ for a SRED loan

The other parts or a SR&ED loan application are as basic as they can be – your financials , a list of any secured creditors , info on who prepared your claim, etc .

SR&ED loans are structured in a unique manner. They typically are set up as a loan with no payments made during the term. Funds are advanced at 70% loan to value – for instance a filed 200k claim would be eligible for a collateral loan of $140,000.00. Naturally when the claim is approved by CRA and funded you receive the balance of 30%, less financing costs.

Banks in Canada don’t really finance a SR&ED loan. So if you want to ‘ side step ‘ the waiting line for cash flowing your R&D claim seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in monetizing your research and development credit .

Author: Stan Prokop7 Park Avenue Financial :


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 : SRED financing


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