Visualizing Banking Your SR&ED R&D Credit ? Finance It R and D  Tax Credit Financing

OVERVIEW – Information on the financing of the Canadian r and d tax credit . Financing a CRA Scientific Research and Experimental Development ‘ sred ‘ claim provides for immediate funds/cash flow for recovery of r&d expenses

The R and D Tax Credit in Canada – You’ve done your part on your CRA Sred Claim, and now it’s up to the program to deliver on your refund chq. A number of issues affect the approval, and the timing of your refundable credit in the form of the government cheque. Financing your claim accelerates that whole process. Let’s dig in.

As a business owner or financial manager that participates in the Canadian SR&ED program it’s not hard to ‘ visualize’ banking that final cheque for this years refund. Numerous issues had to be addressed; including the quality of your claim, who prepares it, and assessing your own firms need to finance the claim to accelerate the refund.

To say it’s not hard to understand the attractiveness of the Govt r and d refund program is almost an understatement. The evidence of that? Simply that thousands of firms like your claim Billions of dollars annually.

That cash refund of course can be used for any general ‘ corporate purpose ‘. That includes working capital, operations, investments in assets, and safe to say starting next years claim again, allowing your firm to meet its competitiveness.

When you leverage the program you’re in effect utilizing the tools the federal and provincial government gives you to prepare and self assess your claim. That involves either preparing the claim yourself, which is certainly allowed but not always recommended. Third party SR&ED ‘ consultants ‘carry the burden of preparing their claim. That benefits owners who not only take advantage of the expertise of these folks, but also utilize the ‘ contingency’ method that SRED Consultants utilize to charge you for their services. (They absorb the cost and time associated wit claim preparation – taking a portion of the final refund as their remuneration)

If the saying ‘ cash flow is king’ applies to pretty well every business it certainly applies to those firms investing in research to maintain their competitive stance. That cash flow, via the SRED refund from Canada Revenue Agency (‘CRA ‘) is accelerated via the financing of your claim.

Let’s outline the basics of a SRED loan. The majority of claims are financed in what we can call a ‘ bridge loan ‘ format. Your firm receives 70% of the amount of the combined fed/prov claim. And the monthly payments. None, because the bridge loan allows you to receive funds today and not pay back the loan until the claim is approved via the CRA process, which can inlcude financial audits, etc.

When we tell clients that they don’t need to visualize the funding in the future imagine their surprise when we cover off some of the more recent developments in R and D tax credit financing. They inlcude receiving funds prior to your actual filing of the claim as well as being able to fund next years claim… today.

Your SRED loan package could not be more basic – it includes your financials, a copy of your claim, info on who prepared it, and any other pertinent basics around a typical business loan.

If you’re looking to ‘ bank ‘, not just ‘ visualize’ your r&d claim seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in funding your refund .. today!

Writer Stan Prokop 7 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 : R and D  Tax Credit Financing


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R and D  Tax Credit Financing


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