Canada’s Scientific Research and Experimental Development (SR&ED) program is the country’s largest government initiative dedicated to supporting domestic businesses engaged in innovation and development. 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.
Below, we’ll examine how financing your SR&ED refund can help your business get ahead and maximize your capital stack. Read on to learn more.
What is SR&ED Financing?
While the SR&ED program is incredibly useful for those conducting R&D, it is not an instant solution for those who may require faster access to capital. There’s a long delay between when eligible expenditures are incurred and when the eventual reimbursement is received. This wait time can leave businesses “stranded” for cash at key development points and cause significant stress that hinders operations.
SR&ED financing is a way of alleviating this stress and protecting your bottom line while also allowing you to cover vital R&D costs like salaries, materials used, contractors (Canadian exclusive), and more. Financing your SR&ED credit with a partner like Venbridge is a valuable way to make the most of your refund while ensuring you have the resources you need when it matters most.
Some of the core benefits of partnering with an SR&ED financier like Venbridge include:
Access Capital Without Sacrificing Equity
While there are many capital sources, including avenues like Venture Capital (VC), SR&ED financing is unique (and highly beneficial) in that it does not require you to sacrifice valuable equity. Financing your accrued tax credits with a lender like Venbridge boosts your balance sheet, while also keeping you in the driver’s seat.
Pursue Further Funding
SR&ED recipients don’t necessarily have to turn a profit from their eligible projects to benefit from program incentives. This is because the government recognizes that pursuing new avenues comes with a high risk of failure, but due to the strict requirements for eligibility regarding documentation and methodology, even if your project fails, there is a high likelihood the work will still produce valuable data that can be extrapolated for other purposes. SR&ED financing allows you to accelerate your tax credit and invest more in eligible projects, which in turn may allow you to earn a larger SR&ED refund.
Want to see how much you’re eligible for when filing? Check out our SR&ED calculator here.
Fuel Your R&D
R&D is an ongoing process that requires constant reinvestment and funding to achieve milestones and progression. Just like acquiring additional funding from external sources allows you to pursue other forms of capital, SR&ED financing allows you to continuously refine your R&D efforts without unnecessary slowdowns that may affect your overall results. The ability to pursue additional R&D efforts may, in turn, make you eligible for more tax credits in subsequent filings and help you keep competitive for the long term.
Liquidity
Having readily available capital is key when it comes to covering the in-the-moment costs that arise from your operations, including overhead and other routine charges. Leveraging SR&ED 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.
Choosing a Trusted Lender
At Venbridge, we believe that financing your SR&ED credits should be quick and straightforward so that you can get back to focusing on operations. Having reliable access to venture debt solutions like those offered by our team makes it easy to bridge the gap and move forward with confidence. Venbridge offers solutions to clients spanning multiple industries.
Learn how we can partner with your team to enhance your R&D initiatives by financing your SR&ED credits by contacting our team today!
