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Looking to expand your funding with the help of government incentives like the SR&ED Program but not sure if you can wait weeks or even months for your refund to arrive? Financing your SR&ED tax credit is a valuable, non-dilutive source of capital that allows you to circumvent some common challenges associated with wait periods and downtime between funding cycles. As a trusted Canadian lender, Venbridge is proud to partner with Canadian businesses that drive forward innovation through Research & Development (R&D) and offer venture debt solutions that offer peace of mind and a clear runway to success.
Below, we’ll take a closer look at some of the basics of the SR&ED program, as well as the benefits of financing your SR&ED refund with a venture debt financier like Venbridge. Read on to learn more!
SR&ED Made Simple: A Quick Review
For those who haven’t applied for SR&ED previously or who desire a quick review of the program’s basic premise, SR&ED was introduced in 1983, and in the past 40 years since its implementation, it has become Canada’s largest government-funded source of financial support for R&D eligible businesses. In 2021, the government provided over $4 billion in SR&ED tax incentives to companies Canada-wide, with the bulk going to businesses in major cities like Vancouver, Montreal and Toronto to help maintain innovative efforts conducted on Canadian soil.
Despite common misconceptions, SR&ED isn’t limited solely to successful research projects or even those that generate revenue but is focused on assisting companies dedicated to new development and technological advancement to keep our nation at the forefront of the international market. SR&ED aims to reduce some of the financial burden associated with R&D and help businesses increase their capital stack by receiving refunds and incentives on qualifying expenditures.
Why Finance Your Refund?
Despite being an extremely valuable program for Canadian businesses, SR&ED has challenges to overcome. The main point of difficulty for companies to contend with is that it can take weeks, or even months (sometimes longer in the case of a review), to receive your tax incentives. These unfortunate slowdowns can have dire consequences for those needing immediate cash flow to continue production and operations. This leads to the need for viable alternative options to keep things running in the interim. Venture debt funding, also known as Capital-as-a-Service (CaaS), is an extremely useful, non-dilutive method that allows you to quickly receive needed capital (in as little as 2-3 business days through Venbridge).
Some benefits of partnering with an SR&ED lender like Venbridge include:
Developing a Sustainable Funding Ecosystem
Funding advances do more than cover immediate operational gaps; they often give you the capital you need to continue to build your businesses and expand core elements that grow your company. From hiring new staff members to procuring necessary materials, when leveraged smartly, SR&ED financing can keep your business cash positive and remove difficult barriers that would otherwise stunt your operational capacity.
Upfront Liquidity
One of the most challenging aspects of procuring any funding is ensuring that capital is available when it matters most. While other funding options play a vital role in increasing your financial runway, the unfortunate reality of relying on external capital is that, sometimes, it’s less accessible than you’d like. SR&ED financing place you back in control (more on that below) and remove the pinch points and frustration caused by slowdowns and long wait periods for receiving your capital. In a market where cash is king, having liquidity is a golden ticket for long-term growth.
No Pre-Revenue Power Struggles
As most startups and veteran business owners will know, equity and control are two of your most significant assets when it comes to growing your company and driving your project toward a successful outcome. While other forms of funding, like venture capitalists, will often require you to relinquish control in the form of equity, non-dilutive solutions like venture debt help you remain in the driver’s seat and control your trajectory without giving up valuable shares in the process.
Transparency
When you partner with an experienced firm like Venbridge, you never have to worry about ambiguity or confusion clouding your judgment. We’re here to be transparent and forthcoming and help you move forward and achieve your objectives with as little hassle as possible. Venbridge financing removes the difficulty of answering to shareholders and external parties that may not always have your best interests in mind and allows you to focus on what matters most: growing your company.
Your Partner in Success: Venbridge
Partnering with a firm like Venbridge that provides non-dilutive financing is one of the best ways to eliminate the roadblocks and headaches associated with waiting for your SR&ED refund. Our trusted lending team offers access to capital in as little as 2-3 business days from approval, and we are proud to have an extensive portfolio of success stories spanning multiple industries, including banking and insurance, clean technologies, life sciences 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!
