Thousands of Canadian businesses use the governments SR ED; (aka SRED) program to recover billions of dollars spent by Canadian firms on experimental research and development on their products and services and technologies.
Let’s focus on 2 things you need to know in the 2010 SRED business environment in Canada.
- First of all, there are some new rules and processes around submitting your claim and the manner in which it is written. We will leave that to the sred consultants and Sr Ed; firms who prepare your claims. However some of the key points are that the government has mandated a new process for the submission of your claims.We can somewhat safely assume that any new government process change on a federal and provincial basis is a learning curve for everyone, including the government we surmise. The essence of the changes is a move to simply simplify and better automate the entire process, which one assumes ultimately will have a major benefit for all , you the sred claimant , as well as the parties within CRA who handle SR ED.; We were somewhat surprise to hear that in actuality you now have only 1400 words within which to identify your submission, and that doesn’t even allow you to include photos, diagrams, etc.
Some other key factors that you and your sred consultant will have to take into account is your ability to slot your company and project within an industry code and specific description around exactly what advance in technology or process that you were attempting to change .
The bottom line quite simply is that in order to ensure your claim becomes eligible you will have to have a slick well prepared document that ensures you ‘ sred gates’, if we may call them that . That might well be the changing of documentation you prepared in the past Vis a Vis backup attachments, photos, long narratives, etc.Work with your sred consultant to ensure that as the new system and processes take affect you have maintained the quality of your claim.
- Now the good news – financing your sred quite frankly hasn’t changed Vis a Vis the process, which we feel quite simply is the same as any other application for business financing process. Financing your sred still makes a lot of sense if your firm can in fact turn a non repayable government grant into working capital and cash flow immediately.
Work with a trusted and experienced sred financing consultant to ensure you maximize both the amount you can finance, which is typically 70% of the total value of your combined federal and provincial claim, and, more importantly – knowing that you’re financing can usually happen within a couple weeks if you have a solid sred claim. Typical backup includes of course the claim itself, information on owners and the business, as well as your ability to address any issues or questions surrounding your sred or your company’s current financial position.
SR ED; financing can quickly reverse any working capital challenges you have, in a matter of weeks usually which is the time it takes to finalize a sred loan and have funds advance. The key collateral focus is of course the sred itself, and no payments are made on the sred financing – the funds advanced to you are netted against the final cheque from the government, less any financing costs.
Consider a sred financing strategy to give your firm an idea about from where to get personal loans same day. what we could call a double kicker – first of all you have received a non repayable grant from the government, and then you have monetized that sred claim to accelerate your cash flow and working capital .Clearly a solid business financing strategy for Canadian business!