No ‘ SRED ‘ Of Doubt ! SR And ED Tax Credits Finance Via A Bridge Loan Is Still Here !

SR & ED Tax credits. Did you or your firm have any doubt about the SRED program in Canada? I think we can safely say thousands did, and the good news is that the SRED Program is still intact... yes some changes, but still alive and well .

And even better news? Your SR ED claim is still 100% financeable with the same criteria that have always been in place.

Let’s step back a bit. Naturally the thousands of business owners in Canada who receive a total of Billions, yes that Billions with our capital ' B ' were conce
ed about what many felt was the best research tax credit scheme ever, the Scientific Research and Experimental Development ( hence ' SR & ED ' ) program .

Criticism and hope abounded from every direction. The government wanted to ensure that funds spent were getting Canada an appropriate return on investment - which seems like a reasonable request for us taxpayer type folks. At the same time thousands of firms used the refundable tax credit as valuable cash flow and working capital to both survive, grow or start their business, and to be able to invest even further in next years r&d.

Many felt the program was too complicated. We're not lawyers, accountants, or government mandarins, so there’s certain issues we won’t weigh in on, and that’s one of them!

The reality is though that close to 4 Billion dollars was being doled out every year to almost 25 thousand firms in Canada, which was a huge portion of the government R&D subsidy. And it was all about return on investment as we said;

Who in fact is benefiting?
How are they benefiting? Etc!

A major report that was widely anticipated concluded that a reduction of the program was appropriate and needed, and that the better choice was for strategic financing initiatives that would bring a better ROI.

Anyway, its over, if in fact the federal budget that was table will be ratified by the government. So yes, there will be changes in how your expenses are computed, and in some cases they will be reduced. Capital expenditures, which were often a large part of the calculation seems to have been eliminated... again futher reducing your total refund.

Certainly the onus is on the industry's private SRED Consultants to prepare higher quality claims and in some cases address their fee structures from a viewpoint of optics.

Anyway, that’s the news from the top! But down here at the bottom, where we toil in the real world sred (sr & Ed) tax credits are still financeable via a bridge loan for the finance of the credit.

The criteria are still the same. Your SR ED claim is generally financed at 70% loan to value... the transaction is structured as a bridge loan with no monthly amortized payments. You receive the balance of your claim, i.e. the other 30% when the claim is audited/approved, less financing costs.

Basic back up info is still required, i.e. a copy of your claim, confirmation of your firms arrears or non arrears to CRA, and your financials. It's as easy as that.

Did you have that ‘ SRED OF DOUBT ‘ ? ! The dust has settled, and if you want to finance your claims via the SR & ED bridge loan speak to a trusted, credible and experienced Canadian busines financing advisor today.