Can I Renew My SR&ED Financing

YES! You can finance your SR&ED every year as long as you qualify. The great news is that if you’re eligible for SR&ED credits, you’ll likely be eligible for financing.

Companies structure their loan agreements differently. Some loan agreements allow for simple renewals and others may require an entirely new set of loan documents. Look for loan documents that allow you to borrow a specific percent of your accrued SR&ED in perpetuity. These are the best agreements because they provide you with an upper limit of your maximum principal (or available loan) on an ongoing basis.

Let’s assume you’re financing a filed SR&ED and the lender’s agreement provides a maximum principal of $300,000 based on your current year SR&ED. When the SR&ED is refunded, it repays the loan and you continue to grow your business. If you would like additional capital at any point, chances are you will need to enter into a new loan agreement, incurring legal costs and potentially fielding additional negotiations. Generally speaking, this inefficient structure should be avoided.