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SR&ED financing (also known as SR ED / SRED Financing) is a very positive working capital strategy to monetize now your SR&ED tax credit filing. Canadian business owners who have filed SR&ED claims in the past are already aware of the great aspects of this program, under which the Canadian federal and provincial governments provide a non repayable grant to your privately owned Canadian company for your expenditures relating to improved products and processes. The fact that you can recover a very significant portion of your salaries, materials, equipment and portions of overhead is in our opinion the best program in Canada as it relates to government actually really helping Canadian business. Many clients approach us and ask about 'government grants and loans '. While there are of course many such programs out there the SR&ED program is real money under a much defined process. And it is non repayable – that's a good thing. Let's assume you are aware of the program, have filed claims, or are filing your first claim. The claim is of course filed at the same time you are filing you year end tax return. The claim can be prepared by yourself, but in our experience 99% of claims are best prepared by specialized consultants of your accountant. So you have prepared a claim and you have filed it. Of course you can wait for your government refund cheque, but that process involves of course also going through the review of your claim by Canada Revenue and in some cases having a technical audit of your claim. The government website indicates that depending on when you are filing, whether it is a first time claim, and if you are filing for multiple years that you can wait anywhere from 4 – 12 months based on some of the above noted factors. CRA in Canada has a specialized team that works in this area and clients tell us that the overall review of your claim is a fairly standardized process – naturally the overall quality and back up your provide to your claim helps finalize proper adjudication and approval . Can you get cash and working capital now for your claim? Yes you can. Simply work with a trusted, credible and experienced business advisor in this area and immediate financing can be provided for your claim.
Clients ask what the basic process is over view to get your filed claim financed. It is a very basic process not unlike any standard business financing application. The basic steps are as follows "
-Complete an application – i.e. business details, your current company financials etc
-Provide details of your SR&ED claim A term sheet can be provided in a matter of days, and claims are financed at generally 70% of the total value of what you have filed, i.e. the combo of the federal and provincial portions. Financing can take place, in our experience in a matter of 2- 4 weeks. You can of course use your SR&ED loan funds for any general corporate purpose, and no payments are made during the loan period. The loan period ends when you claim is processed by Ottawa and you of course receive the other 30% of the claim at that time, less any financing fees. Consider maximizing the Canadian SR&ED claim by turning your filing into immediate cash flow. That is a solid working capital strategy that assists your firm in growth and competitiveness. Stan Prokop is founder of 7 Park Avenue Financial - www.7parkavenuefinancial.com Originating financing for Canadian companies, specializing in working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size . For info and free consultation on Canadian business financing and contact details see: http://www.7parkavenuefinancial.com/Sr_Ed_Financing_Cash_and_Working_Capital_Now.html
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