SR&ED Financing ? Why ? Immediate Cash Flow For Your R&D Capital Recovery Refund Claim

Information on SR&ED financing in Canada. Understanding how your SR ED refund can be monetized and what the benefits are is key to maximizing your r&d capital invesment

SR&ED financing is an immediate financing strategy to convert your filed Canadian SR ED claim into working capital and cash flow for your business.

If your company needs additional cash flow the SR ED financing strategy is a great source of financing and working capital of an ‘ alternative’ nature. Naturally Canadian business owners and financial managers can wait up to 18 months (sometimes longer?) for your non repayable SR ED refund, but if you need the capital you can access those funds now.

SR ED financing is absolutely a boutique, somewhat unknown type of financing in Canada. We recommend that you work with a trusted SR ED advisor who can both maximize your claim (usually 70% of the total value of your claim) and assist you in ensuring the claim can be financed in a relatively short period of time. In claims for our customers that process usually takes 2-3 weeks with your full co operation of course.

Almost everyone agrees that the SR ED grant, which, as noted, is non – repayable! is one of the best government assistance programs in Canada . In our firms opinion both the SR ED grant and the Canadian governments CSBF loan program are the two most clear and viable financing assistance strategies for Canadian businesses.

When we meet with customers to discuss their cash flow and working capital challenges customers always ask us what SR ED financing funds can be used for – the simple answer is any general corporate purpose. We also point out that your claim, in order to be financed, must demonstrate that you have no CRA (the old ‘Revenue Canada ‘) arrears for any government super priorities such as source deductions, GST arrears, etc. We would point out thought that although your claim might not be able to be financed with those arrears in place that you still should file your claim for funding as the claim will reduce or eliminate your arrears, depending on how much is owing to CRA and the value of your filing.

In certain cases we work with customers to pay any of those government arrears out of the financing of the claim – that’s a good thing!

Business that finance SR ED claims clearly understand the value of the program – it gets your firm a significant refund in any research your firm does in products, processes, software, etc .

It is our understanding that over the last couple years the government has sent out cheques for 1.6 Billion dollars in funds for SR ED claims, so:

1. Why wouldn’t your firm consider filing a claim for your funding?

2. Why wouldn’t you consider a SR ED financing strategy for immediate funding of that claim?!

When we meet with customers and ask them what they will use the proceeds of the SR ED financing for they indicate that it will be for very basic working capital requirements – suppliers, payroll, further investment into their R&D processes, purchases of equipment, etc.

SR ED financing is typically in the 70% LTV range, by l t v we mean of course loan to value. That simply means that for every 100.00 of Sr Ed calim you can immediately access, on approval, 70.00 of your total claim. The balance is remitted to our firm once Ottawa and Ontario approve their respective parts of the claim. Naturally there are the financing costs which are typically taken out of that last 30% that is due your firm.

There is no real maximum on the amount of SR ED claim that you can finance, in our own experience claims are generally under one million dollars, but that is not a hard and fast rule.

We referenced working with a good Sr Ed financing advisor who can both maximize your cash out of the claim financing, and steer you through the process as well. In certain instances your bank might have a general security agreement on the claim, (even though they are not financing it?!) so a release is required from the bank, which is generally easy to obtain once we explain what we are trying to achieve.

Many firms ask us what the general criteria are for Sr Ed financing approval. It is essentially a standard business application process; however we clearly note that the emphasis is on the amount and quality of your claim, with significantly less reliance on your balance sheet and income statement. That is because the Sr Ed financing is secured by your actual Sr Ed filing – it’s as simple as that.

Naturally it helps if your overall business outlook is generally positive, or if you are on track to recovering from any setbacks such as a financial loss, or balance sheet issue, etc

Cash flow and working capital needs? Filing SR ED’s? Then consider your Sr Ed financing options!


7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 905 302 4171

Office = 905 829 2653

Email = greg@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

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 100 Million $ of financing for Canadian corporations .


‘ Canadian Business Financing With The Intelligent Use Of Experience ‘

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

7 Park Avenue Financial
Canadian Business Financing