OVERVIEW – Information on financing eligibility for a SRED tax credits claim in Canada . Financing refundable tax credits
A SR&ED tax credits claim is financeable , and in fact financing eligibility allows the business owner/ financial manager to ‘ stop the clock ‘ when it comes to closing the wait time to receive cash on you refundable tax credit . There are some solid reasons to ensure you can cut that wait time whether you finance your claim or not, so let’s dig in.
For those that utilize the SR ED program to recover their research spend they are quite familiar with the basics of the program:
It’s one of the largest, if not THE largest program that supports business in Canada in a very straightforward way – CASH!
Billions are spent on tens of thousands of claimants every year
Major changes in the program occurred in the last few years with the idea of speeding up claims and overall simplification of the program.
We’re focusing on the financing of SR&ED credits – therefore it’s critical that you understand some of the changes that evolved in the last several years. Canada itself has come under attack by business owners and pundits who claim that while billions are spent results in innovations are suspect. We’ll let the armchair quarterbacks debate that one, we’re all for simply letting clients use the program and maximize the claim, and speeding up that cash inflow from the actual credit.
For the approval and financing of claims it’s all about careful completion of the actual documentation under the program. Here the consultants that typically prepare claims focus on the technical uncertainty you attempted to address in your R&D. Qualified consultants know that certain buzzwords can either make or break your claim.
While some claims, often for first timers are in fact audited, requiring more documentation from your firm there are all sorts of govt resources to ensure your claim is approved and refunded.
Aligning yourself with a credible SRED consultant is also key, and that’s also a factor in financing your claim – i.e. the knowledge that it was prepared by a credible party with experience. These days, because of the recent legislation these folks are even required to divulge how much that are charging you to prepare the claim!
How then are claims actually financed? Our opinion is that the financing of the claim is much simpler that preparing one. The claim itself is the main collateral for the loan. Simple business application info on your firm ensures quick financing approval.
Claims are typically financed at 70% of the amt. of the total federal and provincial claim. The remaining 30% is essentially a hold back and is refunded in full when you claim is ultimately funded by the govt. No payments are made for the duration of the loan and financing costs are also deducted from that final funding. Essentially you have cash flowed the loan, it’s as simple as that. Recent innovations in SR&ED financing include the ability to fund your claim prior to filing it, as well as having the potential to fund next years claim… now!
Bottom line? Maximize the tools the govt provides to ensure speedy processing of your claim. And if you want to stop the waiting clock on receiving your refund 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 financing eligibility of your SRED tax credits.
Author: 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 TAX CREDIT LOAN EXPERTISE
Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
Email = email@example.com
‘ Canadian Business Financing With The Intelligent Use Of Experience ‘
7 Park Avenue Financial
Canadian Business Financing