SR&ED Tax Financing – New SR&ED Loan Strategies

June 2nd, 2020 by admin No comments »

SR&ED tax Credits continue to be a strategic method in which Canadian business can both stay competitive and at the same time take advantage of the governments non repayable grants. Most parties agree this is probably the most beneficial grant program in Canada, bar none.

Not only is the program applicable to almost every industry in Canada, but at the same time business owners and financial managers can compound the power of this program by financing their claim. Get cash for my SR ED claim now? Asks Canadian business. The answer is an unqualified yes.

Let’s recap some of the key aspects of the program as they relate to your ability to ‘monetize ‘your tax credit into real cash flow and working capital now. Also, let’s recap and focus on some current issues in your ability to access and maximize your SR&ED claim.

If you aren’t filing a SR&ED claim you certainly can’t finance one. The Canadian government, both federally and provincially reimburse billions of dollars annually to Canadian business in all industries. A few industries seem more tailors made than others for SR&ED claims, example: Software and information technology. But the reality is your firm can be a commercial bakery, a sign company, or an industrial manufacturer. The bottom line is that almost every industry is eligible in some manner.

Government grants SR&ED dollars in its own interest to allow Canadian companies to become more competitive and profitable.

Your claim of course needs to be prepared by a knowledgeable third party. In Canada this essentially is an accountant who is proficient in SR&ED or a third party commonly called a SR&ED consultant. In many cases some consultants specialize in only certain industries, which is a plus.

Recently changes in the entire SR&ED process can both help and hinder your firm in maximizing your total SR&ED credit. Naturally the larger the claims the more amount of cash that you can finance under a tax credit financing.

Canada Revenue Agency has instituted new forms for the claim. Forms are found online at the government website, and in some cases have dramatically simplified your ability to file and explain and back up your claim. For example, the new online from limits the overall technical description of our claim to only 1400 words.

In general almost 75% of claims are not fully audited, and are therefore approved and somewhat fast tracked for refund.

How do some of the new forms and rules affect your ability to finance your claim? When it comes to financing your SR&ED claim it is critical to work with an experienced, credible, and trusted third party. Claims are generally financed at 70% of their overall value. Therefore your ability to have your claim fully document, prepared by a credible third party, and fast tracked into the ‘non audit ‘75% of all claim range is a solid SR&ED financing strategy.

Naturally just because your claim might undergo a SR&ED audit does not mean it is not financeable. The reality is that your claim if it is strong and supportable will be approved and therefore can be financed.

We referenced that claims are financed at 70%. That simply means that the larger your claim you can receive immediately, on financing approval.70 cents on the dollar for your claim. You of course still receive the rest of the claim, less financing costs, when your claim is approved and funded by Ottawa

The entire SR&ED tax credit financing process is very similar to any other business financing. You should not approach it unlike any other financing your firm might contemplate – there is a basic application, which is of course supported by your actual technical claim. The SR&ED loan is collateralized by your claim, as we have stated. Typically a financing can be completed within a couple of weeks, which allows time for application, any due diligence that might be required, as well as documentation and registration of the claim.

If you are filing SR&ED claims in Canada you are among the 15% of businesses that are eligible for this non repayable grant – why not compound the power of that government benefit and consider financing your claim. Accelerate your cash flow and working capital and utilize those funds for any general corporate purpose. A recent firm we worked with chose to finance their sr&ed claim simply because they had seasonal cash flow – they didn’t want to wait for many months for their cheque – and intend to utilize those funds for general business growth and working capital.

So whats our bottom line? Its simply that you should take advantage of the funding under the program, and you may wish to consider monetizing your grant into cash flow now. That’s innovation in both your product and services, as well as your financing strategy! Utilize your funding to accelerate more research and use the cash flow for further growth and development.

Business Loan Strategies to Buy a Business Opportunity

March 17th, 2020 by admin No comments »

When buying a business opportunity that does not include commercial property, borrowers should realize that business loan options will be significantly different when compared to a business purchase that can be acquired with a commercial property loan. This problematic situation occurs because of the normal absence of commercial real estate as collateral for the business financing when buying a business opportunity. In terms of arranging the business loan, efforts to buy a business opportunity are almost always described by commercial borrowers as excessively confusing and difficult.

The comments and suggestions in this report reflect business financing conditions that are frequently offered by substantial lenders willing to provide a business loan to buy a business opportunity throughout most of the United States. There are likely to be circumstances in which a seller will privately fund the acquisition of a business opportunity, and it is not our intent to address those business loan possibilities in this report.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Buying a Business Opportunity – Length of Business Financing to Anticipate

Business financing conditions to buy a business opportunity will frequently involve a reduced amortization period compared to commercial mortgage financing. A maximum term of ten years is typical, and the business loan is likely to require a commercial lease equal to the length of the loan.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Expected Interest Rate Costs for Buying a Business Opportunity

The likely range to buy a business opportunity is 11 to 12 percent in the present commercial loan interest rate circumstances. This is a reasonable level for business opportunity borrowing since it is not unusual for a commercial real estate loan to be in the 10-11 percent area. Because of the lack of commercial property for lender collateral in a small business opportunity transaction, the cost of a business loan to acquire a business is routinely higher than the cost of a commercial property loan.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Down Payment Expectations to Buy a Business Opportunity

A typical down payment for business financing to buy a business opportunity is 20 to 25 percent depending on the type of business and other relevant issues. Some financing from the seller will be viewed as helpful by a commercial lender, and seller financing might also decrease the business opportunity down payment requirement.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Refinancing Alternatives After Buying a Business Opportunity

A critical commercial loan term to expect when acquiring a business opportunity is that refinancing business opportunity financing will routinely be more problematic than the acquisition business loan. There are presently a few business financing programs being developed that are likely to improve future business refinancing alternatives. It is of critical importance to arrange the best terms when buying the business and not rely upon business opportunity refinancing possibilities until these new commercial financing options are finalized.

BUSINESS OPPORTUNITY BUSINESS LOAN STRATEGIES:

Buying a Business Opportunity – Lenders to Avoid

The selection of a commercial lender might be the most important phase of the business financing process for buying a business. An equally important task is avoiding lenders that are unable to finalize a commercial loan for buying a business.

By eliminating such problem lenders, business borrowers will also be in a better position to avoid many other business loan problems typically experienced when buying a business. The proactive approach to avoid problem lenders can have dual benefits because it will contribute to both the long-term financial condition of the business being acquired and the ultimate success of the commercial loan process.

Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.

Marketing, Promoting and Advertising Your Business

February 28th, 2020 by admin No comments »

One thing that goes without saying in today’s business world, is that regardless of the nature of your home based business, a website is an absolute MUST. Whether you have a product or service to sell, whether local or global, your business will go nowhere fast if you don’t have an online presence. If you need internet marketing help, you’ve landed on the right article. I’ll give you some home based business marketing ideas that will help you promote your business successfully.

The first step is choosing a domain name and getting it registered. You can build your own website (if you have the time) and host it yourself or you can have everything done by another company (if you have the money). Either way, you have many options and tools at your disposal that can align with your business plan and budget. Also note that you can still start your own home based business even if you don’t have a product or service to sell. There are thousands of individuals and companies that have products you can sell for them while earning a commission, called affiliate marketing.

Of the many business marketing strategies known to man, internet marketing is, hands down, the best strategy to use for promoting a home based business as it is the cheapest method and has the potential for reaching millions of people all over the globe. Driving traffic to your site through online resources is like killing two birds with one stone. You can tackle print advertising by writing articles and publishing them to directories and ezines and by submitting ads to the many available (and most of them free) classified ad sites. Online media advertising encompasses writing press releases and distributing them to press release sites. One of the biggest and most popular online advertising trends today is via social media advertising through sites such as Twitter, Facebook, and LinkedIn where you build relationships with your customers. Forums and communities are also great ways to build relationships which helps promote your home based business in the long run. Simply Google your market or industry with the word ‘forum’ or ‘community’ behind it and search for one or two that seem to be the best fit for you.

All of these methods of online advertising contribute to search engine optimization (SEO), which is to say improving your online visibility and escalating in the search engines like Google, Yahoo and Bing. Your goal is to claim the #1 spot in the organic search results (the results on the left, not the right side which are paid ads). This is where your traffic will come from. If you are 800 in the list of search results, no one is ever going to see your site because very few people have the time or patience to scroll through 800 search results. Research shows that people typically won’t even scroll past 4 or 5 search results, let alone 800.

Can you grasp the importance of internet marketing for any business? If you are new to the internet marketing phenomenon and don’t know exactly where to start, there are many great programs or systems online that walk you through every aspect of marketing your online business. A lot of these systems were created by online entrepreneurs who have spent thousands of their own dollars trying to figure it all out over the years and finally DID. Their sacrifices have made it easier for newbies to become successful at their own online home based business. If you are new to running your own home based business, I recommend you find a great system (do your research, read reviews, ask questions in forums) and start marketing your home business from there. Don’t waste the time and money that so many of us have in going it alone, without a proven system, as it will just set you back further and hinder your progress.