SR&ED Tax Credit Financing is somewhat misunderstood, or in fact not really considered by many Canadian business owners and financial managers in Canada. We use the word ‘considered ‘simply because many SRED claimants are not aware that their SR&ED claims can be financing as soon as they are filed – in some cases prior to filing!So let’s return to our topic – what are the two things you need to know about financing your SRED tax credit. We’ll keep it simple -1. You have to have a SR&ED claim to obtain financing for the claim!2. A SRED financing claim is in fact similar to any business financing application – frankly it’s quite simpler and more focused!Is that it? Yes, it’s as simple as that. SR&ED tax credit financing is one of the most unique ways to bring valuable cash flow and working capital back into your firm. Just the very nature of SRED itself suggests that your firm relies heavily on the credit to recover the capital you have spent under the government’s quite generous non repayable grant.So let’s return to our point # 1 – to finance a claim, you need a claim. The SRED program in Canada is the governments rebate; in effect it’s a grant, back to Canadian business for any investment you make in research and development. More and more information is coming out everyday from government and private sources which suggest that many firms who are eligible for the program either aren’t aware of it, or even more disappointing, don’t know how to go about preparing and filing a claim. We are often amazed when some clients infer that it’s ‘too much trouble ‘to prepare a SRED claim.A couple of points can be made on this subject. We have met a small handful, and we repeat small handful! Of clients over the years who prepare their own filings. This of course is possible, legal, and in some business owners minds ‘cost effective. The hard reality is that most firms don’t have the technical and financial know how to complete a claim on their own. (Apologies to the firms which successfully prepare a file their own claims – you know who you are!)The majority of claims in the SRED area are prepared by what is known as SRED consultants. We tell clients that these consultants are high specialized, are up to date on current government SRED and accounting matters, and in most cases work on contingency – meaning that they prepare the claim at their own risk and time, and charge a fee which is totally based on success of the final claim approval. If Canadian business owners and financial managers don’t choose to pay a contingency fee then they can play a flat rate based on the SRED consultant’s time on the claim and filing. Naturally more often than not the SRED fee has to be paid as soon as the claim is completed, even if you still have to wait several months to a year to get your funds.More importantly, as it relates to the financing of the SRED claim, a claim tends to be more financeable when it is prepared by a reputable consultant in this area. And in fact when you claim is financed, either at time of filing or prior, the SRED consultant can also be paid in full or in part out of the financing.So the bottom line on our point # 1 is simply – make yourself aware of the program if you are not, prepare a solid claim with the use of a reputable consultant, and be knowledgeable that the claim can be financed during preparation or at time of filing.Let’s move on to point # 2- Clients ask, is it really that simple to finance a SR&ED tax credit. There is only one answer, which is of course yes. You should treat your SRED tax credit financing just as any other basic financing. Because this area of Canadian business financing is somewhat of a boutique are you should ensure you are working with a credible, trusted, and experienced advisor in this area.Let’s cover some of the very simple key basics around the financing of your claim. Most firms are eligible, under the program itself, to receive anywhere from 20-50% of your expenses in the R&D area. Your SRED claim will ultimately have a final value, which is made up of the federal and provincial portions combined. Let’s assume its 200,000.00 as an example. You and your accountant have filed your year end financials, and included a SRED claim of 200k. What happens now if you want to finance that claim. The reality is that you simply have to fill out a standard business financing application – just as if you were borrowing for any other matter. In our case the ‘collateral ‘, if we can call it that, it’s the SRED claim.Important to note hear that you are not incurring debt or creating a ‘ loan ‘ on the SRED – Your balance sheet stays intact, you are simply ‘ monetizing ‘ the SRED claim in order to generate working capital and cash flow now. Generally you receive approximately 70% of the claim as an advance, with the 30% held back and payable to yourself in full when you final claim is audited, approved, and that cheque from the government is ‘in the mail ‘! The financing feels itself, associated with the tax credit financing are deducted from that final 30% holdback. You can generally create a SRED loan for a period of a minimum of 60 days, but most SRED financing generally last from 3-12 months, depending on the size of your claim, its eligibility with CRA, and whether you are a first time filer.So whats our bottom line – it couldn’t be simpler:- Make yourself aware of this great program – prepare a proper claim with someone who is experienced
- If you are focused on cash flow and working capital needs consider financing your claim and directly monetizing this great program

Searching for the best online business ideas is a good way to make your transition from employee to entrepreneur…However, becoming an entrepreneur is never easy if you’ve been stuck all your life as a hostage employee, as there’s always a learning curve. And most of this is simply getting out of the mindset of trading time for money, and into the mindset of giving more in value than you take in financial gain.But that mindset transition will send you into taking control of your life in a way you never believed were possible.Of course, the best online business ideas will enable you to achieve a way higher level of income than you could ever imagine when you compare it to working as an employee…So where’s the “meat and potatoes”?OK… here’s a 5-step formula to follow to make sure that the choice you make can teach you how to run a successful business online and give you enough space to transform your mindset from employee to entrepreneur:The Best Online Business Ideas Contain a Means for Viral Sustainability…”Viral sustainability” means that it’s a business that is sustained by the efforts of other people. For online marketers, it’s turning one lead into two or more.Consider these guidelines for the best online business ideas..1) The best online business contains a valuable product with nothing to ship.What do I mean by that? Well, for example, people are constantly paying hundreds and thousands of dollars for e-books with information. Digital informational such as this is first and foremost of the best online business ideas, as you don’t want to be caught up having to pack and ship products.After all, you want to train yourself to become the boss, not a freight shipper!Digital products that are sent out automatically are best, because the more automatic you can make your business, the more time you’ll have for marketing.2) The best online business should pay you 100% commissions after business expenses.By business expenses, I mean the costs for marketing and administration. The reason I mentioned the E-book idea above is that it would be your own creation; and, therefore, it would pay 100% commissions. Also, it can be sustained on autopilot with a buy button on your blog.What about network marketing products?While the average network marketing product is not really a “scam”, as some people think, the problem with sustaining your network marketing sales on autopilot is that people really need to build relationships in order to join your business.This means that, once you become “successful”, you wind up finding yourself on the phone all day and night building your business. This does not create leverage in your business. Also, the average 20% commission level is not enough to pour into marketing. And, even with the best online business ideas, marketing does cost money!3) The best online business contains an up-sell option in your program.Any successful businessperson will tell you that it’s easier to sell more to a current customer than to get additional customers. Therefore, doesn’t it make sense to have an automatic up-sell feature as you work online from home? Your initial products should be very cost-effective to lure your customer in… and the up-sell products can be more expensive after you’ve gained the customer’s trust.4) The best online business contains compelling capture pages.This is also called the “landing page”, or page that the prospect lands on first where he is prompted to enter his email for additional information. You need to take special care in creating this page because it means the difference between “capturing” your lead, and losing your lead.5) The best online business contains professional ad-copy.”Ad-copy” is marketing terms for good writing that touches people on an emotional level. The most cost-effective way of starting an online business, of course, is blogging. This is where your learning curve is the most transforming. Keep in mind that your blog is the “internet you”, so as long as you keep it real and relate your real life stories in the form of blog posts or videos, people who follow you will come to know you.Once you get the above 5 features setup on autopilot, it’s advisable to invest in outsourcing to maintain the online business to “sustain itself”.