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Financing sr ed tax credit claims – Why a SRED Bridge Loan Make Sense

Guest post by: Stan Prokop

Article Overview: Information on financing sr&ed tax credit claims and how a sred bridge loan can be utilized to increase cash flow and working capital for firms utilizing sr ed research and development

Financing sr ed tax credit claims – Why a SRED Bridge Loan Make Sense

Purchased your lottery ticket yet? It's a 3 Billion dollar prize. That's the feeling our clients have when they have secured their ticket (which is their sr Ed tax credit claim) to the three billion dollars the Canadian government provides each year for the Canadian SR&ED program. And the reality is with a properly submitted claim your odds of winning are much better than those lotteries - they approximate a 100% chance! We haven't had those odds in our favor in awhile!

Let's talk about why a sr&Ed bridge loan might make sense for the monetizing of the R&D non repayable grants that the government provides to Canadian firms who submit a claim for the program. Financing a sr ed tax credit claim allows you to cash flow, or monetize , however you want to call it your portion of the largest tax incentive program in Canada .

We have always told clients that the sr&Ed bridge loan makes sense, in our opinion, because it in essence fills the gap between your ability to get approved for the funds and receive those funds.

You have already made your commitment to R&D via your ability to innovate - so why no supercharge that innovation and turn those funds into cash. Financing sr Ed tax credit claim strategies provide your firm with the capital you need to further innovate and of course run your business.

We know by experience with our clients that many of the firms who participate in Canada's Sred program are whats known as pre revenue firms to finance professionals - in other terminology you're a start up, or very close to it. Accessing capital is hard when you are a start up - your firm simply doesn't have the sales, profits, and the corresponding balance sheet and income statements to support the borrowing of capital.

If you're an established business and you have accounts receivable they can be financed of course. Well, guess what, you do have an account receivable that can be financed, it's simply that it is known by another name - it's your sr&Ed claim! A SR&ED bridge loan becomes an external source of capital that you otherwise might not be access based on traditional borrowing requirements.

A great strategy is simply to take advantage of financing sr ed tax credit claim and invest those funds in marketing the viability of your innovation that you achieved via the sr ed process . That is when a sr&Ed bridge loan makes total sense.

Capital is critical to any firm, whether you are the start up we just talked about, or an established firm simply desiring to grow your competitive edge and finance your business on an ongoing basis. Banks, venture capitalists, and private equity investors, etc don't really finance sred claims.

In order to facilitate the financing of your calim seek an independent finance firm that specializes in this area. A trusted , credible and experience Canadian business financing advisor can have a sr&ed bridge loan completed in a couple of weeks with your firms full co operation . A simple application, a copy of your sred filing, and the normal due diligence associated with any business financing can be completed very quickly and efficiently.

Does it make sense to finance your sr&Ed claim - we think we've shown it has. The sred financing closes the gap between your innovation and the continued commercialization of your products and services, providing you with capital to maintain your competitive edge.

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Article Tags: financing sr ed tax credit claims, Sred Bridge Loan



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