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If you’re looking to make the most of your Research and Development (R&D) initiatives in 2023, knowing how to increase and extend your funding is essential. At Venbridge, we’re proud to partner with companies across Canada to offer trusted non-dilutive venture debt solutions that allow you to pursue innovation and development without the stress of overhead costs and managing capital flow. With the help of non-dilutive funding, you can keep hold of valuable equity while maximizing the benefits of your Scientific Research and Experimental Development (SRED) tax refund.
Below, we’ll examine how SRED financing can help your business get ahead and maximize your capital stack. Read on to learn more.
What is Venture Debt Financing?
Venture debt financing allows investees to acquire funding quickly, often to bridge the gap between the acceptance of government tax incentives like SR&ED or any corporate loan. When leveraged as part of your capital stack, venture debt financing (or Capital-As-A-Service or CaaS) can be an invaluable resource that helps keep your operations active and alleviate headaches caused by managing R&D costs like salaries, materials used, contractor (Canadian exclusive), and more. Financing your SRED credit with a partner like Venbridge can be a great way to make the most of your refund while ensuring you have the resource you need when it matters most.
Accessing your SRED refund with a CaaS loan can enable your business to:
Boost Your Valuations (and Avoid Dilution)
The unfortunate reality for many startups and R&D-focused businesses across Canada is that funding schedules, especially those that rely on government capital, don’t always coincide with valuation dates and the needs of your extended runway for fees, etc. This lack of alignment can strain your resources, making readily available funding essential to keeping everything moving as smoothly as possible without having to give up valuable equity.
Secure Further Funding
Did you know that your company can still be eligible for the SRED tax incentive even if you have yet to turn a profit or generate consistent revenue? The purpose of the SRED tax incentive is to support Canadian-grown innovation. SR&ED recipients don’t necessarily have to turn a profit to have their applications accepted. This is particularly useful for startups and companies whose R&D cycle may take longer to enter into a more profitable stage of development. CaaS loans can give you the cash you need to apply for and initiate other forms of funding, enhancing your overall capital stack and giving you the finance you need to pursue activities that may allow for additional SRED tax credits down the line.
Reinvest in R&D Activities
One of the essential parts of growing your project or initiative is continuously having access to capital that allows you to refine your R&D cycle after cycle. Performing additional R&D activities may make you eligible for more tax credits while keeping your projects moving ahead and putting you in a competitive market spot for the long term.
Financial Liquidity
As all business owners know, liquid capital is king when managing daily operations, the cost of overhead and other core expenses. Leveraging SRED financing for R&D-based costs can free up other assets needed for different areas of your business, giving you the liquidity you require to stay within your annual budgetary guidelines. Partnering with a trusted financial lender like Vendbridge removes ambiguity and strain during slow periods and while you wait for SRED funding to arrive.
Finance Your SRED Refund With Venbridge
At Venbridge, we know that R&D-involved companies can often find themselves needing capital while waiting for government grants and tax credits like the SRED program to arrive. Having reliable access to venture debt solutions like those offered by our team makes it easy to bridge the gap and move forward confidently. With the help of Venbridge’s financing, you can easily fund and invest in core company assets like:
- Hiring new employees and covering payroll expenses
- Product rollout and market launches in Canada
- Enhanced product and/or service development
- Pursue additional long-term funding from external investors
- Cover material costs, and more.
At Venbridge, we believe that financing your SRED claim should be quick and straightforward so you can get back to growing your business. If you have a minimum SRED claim of $130k and one year of filing history, our accelerated due diligence process can give you access to the funding you need in as little as two business days. Venbridge offers the highest loan-to-value financing on the market and is proud to partner with clients spanning multiple industries, including banking and insurance, clean technologies, artificial intelligence, biotechnology and pharmaceuticals, energy and natural resources and more.
Learn how we can partner with your team to enhance your R&D initiatives through venture debt lending by contacting our team today!
Want to see how much your potential SRED tax credits could be? Use our free online tool here!
