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How To Qualify For Sred Tax Credit Financing and Why Sr ed Program Cash Flow works!

Guest post by: Stan Prokop

Article Overview: Information on sred tax credit financing and why sr ed program cash flow can be the additional working capital you need to grow sales and profits .

How To Qualify For Sred Tax Credit Financing and Why Sr ed Program Cash Flow works!

Get with the Program ! is an oft used term in business that we often hear . Well, a Sred tax credit financing for Sr Ed program cash flow clearly puts you with the program!

Why Canadian business owners and their financial managers don’t take advantage of the SRED (formally the ' Scientific Research and Experimental Development) tax incentive is beyond us. And when they do take advantage of the program and then don’t at least consider financing their tax credit we really wonder about what they are thinking! Because we can assure our clients their competitors are both utilizing the program as well as financing their claims for instant cash flow and working capital needs.

To finance a claim you of course have to have one, so let’s take a small step back and re cap the program. It's simply, bar none in our opinion, the best government grant type program out their, and grant of course means non repayable and we like that even better.

The program has been around now for 30 years and provides Canadian business with billions of dollars of non repayable grants for the work and funds you expend on R&D in Canada. Almost 20,000 firms take advantage of the program annually - that’s a lot but in reality many firms that are eligible apparently don’t - either not knowing about the program or we guess not interested in free funding. If you can believe that!

The sred tax credit financing program allows you to claim for expenses that qualify in equpment, training, parts of your overhead and salaries, as well as of course the core research you do in developing new products and services.

So, you have determined you qualify, and are further interested in both preparing your claim as well as financing it immediately after it is filed. How is that done ?

SR Ed program cash flow arises out of the claim you file. Larger claims mean larger financings - in Canada typically 70% of your total claim can be financed - that typically means for every 100 dollars of claim filed you receive a bridge loan of 70 dollars. Those funds can be used for basically any sort of corporate purpose. We typically encourage clients to consider using the funds for general working capital, reduction in payables, equipment acquisition, and, who could forget, more research and development to stay ahead of your competitors in the market place.

Good sr Ed claims are usually prepared by qualified sr Ed consultants that know your industry. They maximize your claim and their credentials add professionalism to the viability of your claim being approved in totality. Even if the claims are clawed back the program managers in Ottawa it still of course makes sense to file a claim.

To successfully complete a sred tax credit financing you simply complete a basic business application and provide details of your filed sr Ed. The claim itself is of course the collateral for the bridge loan. Sr Ed program cash flow makes sense because you are simply monetizing a receivable (the sr Ed claim itself) and taking advantage of using non repayable cash now, as opposed to in the future.

Speak to a trusted, credible and experienced Canadian business financing advisor on why cash flow for sr&Ed claims might make great business sense.

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Article Tags: sr ed program cash flow, sred tax credit financing



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