Semantics we tell clients. You can call it you Sred claim, your Shred claim ( they use that a lot also ! ) or your SR and ED claim . You can even throw in an ampersand and correctly write it as SR&ED.
But there is only one bottom line, which is, why you aren’t considering financing your claim. Putting our semantics aside many business owners and financial managers are inquiring as to the financeability of their claim. More often that not they have been told by their bank that this type of claim is not financeable, and even though you are showing it on your books as a receivable it cannot be margined for working capital and cash flow .
Two words. They are wrong, as Sr Ed claims can be financed in a large number of situations. They are financed utilizing Sr Ed Canadian business financing advisors who are experienced in this niche area of Canadian finance.
We believe it’s always good to recap the basic and set the stage for our financing discussion. The program is of coruse a federal program, in concert with the provinces, that encourages small, medium, and dare we say it, large corporations to conduct research on products, process, etc.
How committed is the government to this program ask clients? Very we say, given that approximately 4 Billion dollars are doled out each year to the 1/3 of the companies that take advantage of the program. That of course infers that 2/3 of eligible customers in fact don’t use the program. We have heard a litany of reasons around why they don’t from clients – they include : we’re too busy, its sounds complicated, we don’t want to get audited , our r&d spending is not large enough, etc . These firms would simply be better off keeping it simple and saying, ‘ No we don’t want funds that are non repayable that re -imburse us for our r&d’, because that’s in effect what they are saying.
If you have a valid claim prepared by either an experienced internal party, but more preferably a true sred consultant then you can finance your claim. Funds for approximately 70% of the claim value are provided to your firm with the collateral of course being the SR ED receivable. Of course you can wait for 3, 6, or 12 months to receive your funds, but why not consider putting that valuable cash flow and working capital back to work in your business.
Clients who finance Sr &ed claims typically use the funds for general working capital purposes, further r&d , new equipment, marketing, etc . The bottom line is that you choose the use of the funds. And by the way, that other 30% of your claim is still yours of course, it’s returned to your firm, less financing costs, when the government sends your cheque. And get the news get any better, but no payments are made on the SR Ed loan, interest simply accrues and is calculated at the end of the financing.
Don’t fail to consider sr &Ed financing as a way to stay one step ahead of the competition and satisfy your cash flow and working capital needs at the same time. Speak to a trusted, credible and experienced sred Canadian business financing advisor to assist you with the factoring of your claim.