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To ensure Canada is a global player in the market, the federal and provincial governments offer several tax credits to eligible businesses. These tax credits support companies so they can conduct groundbreaking research, yield higher earnings, increase their share in the market, and enhance productivity. Business tax credit financing is a founder-friendly, non-dilutive funding solution that ensures businesses can access the capital they need when they need it the most. Next, we’ll tell you more about business tax credits and how you can finance these credits with Venbridge. Keep reading to learn more!
What are Business Tax Credits?
Simply put, business tax credits are an amount that companies can deduct from the taxes owed to a government. When companies receive these tax credits, they can apply them to their tax return and reap the benefits. Business tax credits come in two forms: refundable and non-refundable. Refundable credits, such as those accrued by the Scientific Research and Experimental Development (SR&ED) program, are, as they sound, a refund a company receives based on its SR&ED-eligible expenses. In contrast, non-refundable tax credits get applied to reduce your business’s overall tax liabilities (in some cases, SR&ED can be a non-refundable tax credit.) Many business activities qualify for many tax credits. From infrastructure upgrades to digital expansion, sustainability efforts, and more, the Canadian federal and provincial governments extend tax credits for companies involved in a wide range of work.
How Do Tax Credits Differ from Other Incentives?
Aside from refundable and non-refundable tax credits, companies may also receive tax deductions. While tax credits mitigate a business’s tax liability, a deduction lowers its taxable income.
Who Qualifies to Receive Tax Credits?
The short answer to this question is that it depends on the tax credit! No matter the specific tax credit, if your company is looking to obtain credits, there are particular requirements you must fulfill throughout the fiscal year to be eligible. Once your business has met the specific criteria, you can file the necessary tax credit forms with your income tax return at the end of the year.
How Does Tax Credit Financing Work?
While some business tax credits offer Canadian companies an opportunity to access substantial refunds for eligible expenses, unfortunately, they typically are not accessible right away. Most business tax credits, such as the Scientific Research and Experimental Development (SR&ED) tax credit, are only disbursed after your company’s annual tax claim is assessed and processed. Luckily, Venbridge is here to help!
With Venbridge, your company can finance your business tax credits so that you may access those funds sooner. Since many business tax credits, including SR&ED, are refundable, businesses like yours can use them as collateral for financing. Financing companies such as Venbridge use the security of your company’s future business tax credits to extend a loan, thus giving your business capital to invest in innovative projects and the future! So if your company has been looking for a way to fund ongoing projects or conduct other tax credit-eligible work, Venbridge is here to help!
Can I Finance SR&ED Tax Credits?
The short answer is YES! One of the most common business efforts that Canadian tax credits support is research and development (R&D), especially R&D associated with the SR&ED tax incentive program. SR&ED is one of the most extensive federal programs for R&D in Canada. This program provides over $4 billion in tax incentives to thousands of businesses across a diverse range of industries annually. Many companies in Canada earn SR&ED tax credits as refunds, but they may also be acquired as income tax deductions.
At Venbridge, we offer non-dilutive, founder-friendly SR&ED tax credit financing for companies needing access to their funds to continue their R&D work and grow their business. If you want to find out your estimated total SR&ED tax credits/ refund, take advantage of Venbridge’s SR&ED calculator today! Then, let our team help you access that capital in as little as three business days instead of waiting for your refund.
How Venbridge Can Help
If your company has been searching for a quick and straightforward way to finance your business tax credits, including the SR&ED tax credits, look no further than Venbridge! Our non-dilutive venture debt and business tax credit financing ensure your company has the funds to grow and continue making groundbreaking innovations that will benefit all of Canada.
Contact Venbridge today to learn more about financing your business tax credits!
