Reading time: 4 minutes
One common challenge for growing Canadian businesses is managing cash flow. Funds must be available on a schedule that allows them to maintain their current work and grow. However, all sources of capital have advantages and disadvantages, and it’s critical to consider each option carefully. At Venbridge, we aim to help companies navigate their cashflow shortfalls by offering Scientific Research and Experimental Development (SR&ED) and Digital Media Tax Credit financing solutions. Below we’ll tell you more about SR&ED financing with Venbridge and some key advantages your company can benefit from by partnering with Venbridge.
Why Consider Financing Your SR&ED Tax Credits
One of the many ways companies select to maximize their deployed capital and offset some of their costs is by filing for research and development (R&D) related tax credits. Unfortunately, they tend to have a lengthy application process that requires considerable time and effort from senior management. The cost of occupying management’s time and the delay in receiving funds cannot be overlooked. However, there is a solution!
With Venbridge, your company can finance your SR&ED tax credits in a streamlined process. SR&ED loans with Venbridge mean that with the help of our team, your company can obtain the capital you need to continue growing your company in just a few days. Your company’s SR&ED tax credits secure its SR&ED loan, meaning you can access the funds you need without having to give up equity.
SR&ED loans from Venbridge are the founder-friendly, non-dilutive solution your company has been searching for!
What is Capital on Demand?
Many Canadian companies meet the criteria to receive SR&ED tax credits both federally and provincially. That means when these businesses incur eligible expenditures on SR&ED projects, they are accruing refundable tax credits. However, while these credits accumulate throughout the year, your company will not receive them until after your SR&ED claim is filed with your company’s tax return. Even then, it can take months for the Canada Revenue Agency to process your claim and begin sending funds. Fortunately, SR&ED financing with Venbridge expedites this refund, giving your company on-demand access to funding throughout the year! This process allows your business to manage the timing of your refund. Depending on your company’s needs, you will then be able to do some of the following with your capital on demand:
1) Extend Your Runway
Timing is everything when it comes to raising funds. Early-stage companies and start-ups can delay diluting equity by utilizing their SR&ED refund. This enables businesses to extend their runway and boost valuations before diluting equity in exchange for capital.
2) Secure More Grants
Regardless of the size of your project, grants are an attractive option for funding. However, businesses often need to find a large part of their projects to be eligible in the first place. Numerous incentive programs require successful companies to incur expenditures first and then use grant payments as reimbursements. By tapping into accrued SR&ED tax credits through an SR&ED loan, companies can acquire the cash they need to access those grants. Depending on the project, work, and grant, your project may generate more SR&ED credits, thus further increasing your tax refund. With proper planning and a sound incentives strategy, your company may significantly reduce its need for outside capital.
3) Reinvest into R&D and Increase Your Refund
Moreover, companies can utilize their SR&ED loans to fund additional research and development (R&D). By doing more R&D work, your company can receive more SR&ED tax credits, thereby increasing your subsequent tax refund. While simultaneously accelerating your projects and getting a step ahead of the competition.
4) Free Up Funds for Other Projects
Many Canadian companies have an allocated annual R&D budget they cannot exceed. But businesses can free up those funds for other projects by paying for ongoing R&D work with the SR&ED accrued from eligible projects. That way, they may stay within their budgetary limits while maximizing their tax credit refund.
SR&ED Financing from Venbridge
Using Venbridge’s on-demand SR&ED loans to get the capital your Canadian company needs helps make managing your cash flow much simpler and more efficient.
There are many other ways your business can put your SR&ED capital to use. Contact Venbridge today to learn more about financing your SR&ED refund!
