OVERVIEW – Information on financing sred tax incentives in Canada . A SR ED loan for your r&d claim simply accelerates the cash flow you’re looking for in your SR&ED refundable credit
Sred tax credit incentives in Canada often have many business owners/financial managers feeling like they wish they had access to a ‘ hotline’ of sorts, if only for the reason of knowing when they will receive their refund and what sort of timelines are involved . Let’s examine why SR&ED financing has increased, providing an instant solution to your hotline call! Let’s dig in.
The thousands of firms that file ‘ SHRED’ claims annually are hardly ‘ complainers’. They no doubt appreciate any legitimate Canadian govt program that proves billions of dollars annually every year, allowing business to recoup valuable dollars spent on research and development of products and processes. And your firm ability to maximize a refund simply allows to you accelerate next years spend to maintain your competitive stance.
At the point that any business owners conjures up the idea determining when the SR ED claim will be funded a lot of the hard work has of course been done . As a very general rule most firms recoup in the area of 35% of their R&D spend. That sred claim becomes a ‘ refundable tax credit’ once you file your annual financial statements. The question of whether the amount of work required to file a claim is worth it is often debated. We’ll raise two points on the issue –
– Among the 3000-4000 firms annually that file there are no doubt some of your competitors
– The actual claim itself for the vast majority of the program is prepared by a third party consultant. These ‘ SRED CONSULTANTS’ have geared their industry towards a ‘ no claim / no charge’ business model. So while they take a percentage of the final refund (this has come down dramatically in the last few years) your firm has no financial risk. And naturally any firm that has filed in the past successfully builds up a track record with both CRA and the consultants themselves.
The govt has done their share of streamlining things over the last few years. While some expenses claimed have in fact been removed ( capital expenditures relating to the r and d for example ), the whole application process is now online, forcing SR&ED consultants to be very precise with the limited amount of info the provide to back up and document your claim.
As we’ve noted, the solution to eliminating all the waiting in your refund lies in SR ED Loan financing. This financing is among the most flexible in Canada. While the main collateral for your loan is simple the proceeds of your refund, the loan structure itself is very appealing.
SRED Finance loans are structured as ‘ bridge loans’. You receive approximately 70%of the full amount of your combined fed/prov claim as an immediate advance. By the way that advance can be accomplished prior to actually filing your claim as long as a basic SRED loan application is submitted. The balance of your refund, i.e. the 30% is returned to you when the govt processes your claim – less financing costs. The bottom line – no monthly payments!
Many clients often ask us how they handle the proceeds of the claim – the answer is that the funds can be used for any business purpose – i.e. working capital/cash flow needs, re-starting next years research, reducing payables, etc.
To eliminate your need to call a SR ED hotline consider financing your SR&ED tax credit incentives – seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your needs . Become part of the ‘ unstoppable rise ‘ of SRED finance in Canada.
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 :
7 PARK AVENUE FINANCIAL = CANADIAN SR&ED LOAN FINANCE EXPERTISE
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