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SRED Financing - Finance SR&ED Claims Today

Guest post by: Stan Prokop

Article Overview: SRED Loans for Cash and Working Capital Now

SRED Financing - Finance SR&ED Claims Today

SRED financing is simply the method by which you can, our firms own option, monetize or 'cash flow ' you Sr&Ed tax credit and generate needed working capital and cash flow for ongoing operations or of course further investment in your r&d processes and development .

We have all seen the oil change commercial where the mechanic states 'you can pay me now or pay me later '. Well financing your sred claim has a similar ring to it - of course you have the option of waiting for the government at the federal and provincial levels to mail your firm your cheque - that could take anywhere from 1-12 months - Or you can arrange to finance that claim now and utilize those funds for any business purpose .

Are we eligible to finance our sr&Ed claim? Clients often ask. We can only replay that if you have a claim, and have filed it, your are in fact eligible. In fact, under certain circumstance it can be arranged to receive funds even prior to filing.

Clearly the pure financial benefits of the sred grant program in Canada are numerous - you receive significant amounts back from expenditures made on research, including wages and salaries associated with that research, as well as major portions of material and equipment expenses.

All of those above noted expenses are 'cash out 'to your firm - the funds have been spent .So why not consider financing your claim and receiving those funds back in an extremely timely manner.

We can almost hear some of your questions now as you review our information, as they are typical of what many clients ask:

-How exactly do I monetize the sred claim

-What exactly is a sred loan - is there additional debt involved

-How long does it take and what does it cost?

Let's cover off some of those very basic questions so you can feel comfortable about the sred financing process. The sred financing, or the monetization or cash flowing of you sred claim is simply a business financing that uses the actual sred claim as collateral. You receive approximately 70% of the full federal and provincial total as a short term cash loan that is collateralized by the sred itself. Of course the additional 30% is still yours, it is simply held back as a buffer for any adjustments that are made to your claim.

No payments are made on your sred loan, and the final cheque to you firm (you have already received 70%) is the holdback amount less the financing costs. So you have pure cash flow and additional working capital, no long term debt associated with a loan per se, and no payments are made. That is truly creative business financing for which most Canadian business owners are not even aware.

The typical process to create a sr&Ed financing is approximately 2-3 weeks, you should quite frankly view it as any other business application - the usual business info and backup on your firm, plus of course the details of the sred financing.

In summary, have your claim prepared by a qualified sred consultant - recent submission rules and styles have changed.

If you have unlimited cash flow and working capital resources by all means wait for your cheque - if you want to cash flow or discount your claim speak to a credible , experienced and trusted business financing advisor in this area .

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Article Tags: finance sred claims, sred financing, sred loans



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