| Your ability to finance your SRED claim (aka 'sr&ed | | | | some key factors as your first time filing, and the |
| claim) simply signifies the cash flowing of your non | | | | due diligence that SRED employees do on the |
| repayable government grant. We think that anytime | | | | technical and financial aspects of your claim. |
| you can hasten cash from the government and turn | | | | So you are eligible for Sr&Ed. You have filed a claim. |
| that into immediate cash flow and working capital, | | | | You have been made aware you can finance the |
| well... that is a good thing. | | | | claim, but you are not sure how. In general the banks |
| SRED grants, (sr&Ed grants) are of course the funds | | | | in Canada don't finance these sorts of claims - that's |
| you received from Canada Revenue Agency based | | | | a general statement, but 99% of the time we are |
| on the filing of your Scientific Research and | | | | pretty sure we are correct in making that comment. |
| Experimental Development (SR&ED) claim. These | | | | Therefore it is strongly recommended you contact a |
| funds have never been more generous and many | | | | business financing advisor who specializes in SRED |
| Canadian business owners and financial managers are | | | | finance. At that point it's a relatively simply process, |
| not aware that the program even exists, let alone | | | | and we encourage clients to view it as they would |
| their ability to partake in the billions of dollars of non | | | | any business financing, from a lease to a loan |
| repayable grants issued by this department within | | | | arrangement. There is standard application |
| CRA Canada. Essentially it is the largest support for | | | | information, and the whole process, up to an including |
| research in Canada. Many clients are always asking us | | | | funding, can be completed in a manner of weeks. |
| if there are 'government grants and loans '. We are | | | | As a general rule it makes sense to finance claims |
| of the opinion that the two best programs in Canada | | | | that are over 250k in size, but quite frankly smaller |
| to finance your firm are the federal BIL/CSBF loan | | | | claims can also be financed. There is no challenge to |
| and of course the SRED program. | | | | the amount of financing re the size of a SRED filing - |
| Your firm ability to generate a claim immediately | | | | Claims well in excess of a million dollars can be easily |
| turns into a non repayable cash grant. Timing is | | | | financed. |
| everything, and you have the ability to finance that | | | | The key advantage of financing a claim is that you |
| claim if you want to monetize those funds and get | | | | are not undertaking any debt; you are just |
| them working inside your firm. For many early stage | | | | discounting a receivable that you have - that |
| and start up firms the ability to finance their SRED | | | | receivable being the SRED claim itself. The sr&ed |
| claim is often the largest receivable the firm has that | | | | filing itself is the actual collateral for the financing - |
| year. And the beauty of the program is of course | | | | and if you want more good news then you should be |
| that as along as your firm is a private corporation | | | | aware you don't makes payments on a SRED claim |
| you can partake in these funds. | | | | finance. The funds advanced are netted out from |
| As companies, and even as consumers we generally | | | | your final chq from the government. Usually SRED |
| use an 'expert 'to prepare our taxes and file them. It | | | | claims are financed at 70% of their filed value that |
| is certainly no different with SRED and we | | | | leaves a buffer in case part of the claim is downsized |
| recommend that you use a sr&Ed consultant to | | | | when approved. |
| ensure your claim is prepared properly. Naturally using | | | | Cash flow is king, if you have a SRED claim be aware |
| their own expertise, or the governments self | | | | that claim is financeable, and your ability to get those |
| assessment tool you want to be sure you are eligible | | | | fund working again usually puts you in a more |
| for the grant, given that it takes time to prepare and | | | | competitive stance within your industry, and allows |
| file the claim. | | | | those funds to be used for further research or any |
| Naturally after filing a professionally prepared claim | | | | general working capital purpose. Speak to a trusted, |
| you are of course entitled to wait for you cheque - | | | | credible and experienced advisor in this area to |
| that timeframe can be anywhere from a couple of | | | | ensure you are aware of the benefits of sr&Ed |
| months to potentially close to a year depending on | | | | finance - claim those funds! |