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There are many options to consider when sourcing funding for your startup or scaling company, and it’s important to remember that not all sources of capital are created equal. Non-dilutive funding options are uniquely suited to facilitating a company’s growth, allowing it the opportunity to improve its valuation and secure a more attractive deal when seeking venture investment.
At Easly, we’ve supported over 300 companies by providing the non-dilutive funding they need to scale through our Scientific Research and Experimental Development (SR&ED) tax credit financing. Below, we will discuss non-dilutive funding and how Easly Advances can support your business. Continue reading to find out more.
Understanding Non-Dilutive Funding
As a Canadian startup or small business, gaining access to the capital you need can be complex. While many avenues are available to obtain funding, such as angel investors, bank loans, and grants, it is crucial to be aware of how these funding opportunities may impact your business’s ability to grow sustainably.
For instance, angel investors will approach a startup early on to help the business take its first steps; however, the trade-off often means ceding a relatively large portion of ownership to secure said capital. That’s why, for many startups and small businesses, it’s crucial to understand what other funding options are available.
Non-dilutive funding options are a great choice for many startups and scaling businesses, as it allows founders to retain ownership while funding their growth. This is where non-dilutive funding from a firm like Easly comes into play by providing SR&ED financing.
What Is SR&ED Tax Credit Financing?
The Scientific Research and Experimental Development (SR&ED) tax incentive program is Canada’s largest source of government-funded financial support for research and development (R&D). This program enables companies across various industries to pioneer R&D initiatives by providing either a refundable or non-refundable investment tax credit (ITC), depending on certain variables.
Canadian businesses accrue SR&ED tax credits for various expenditures relating to eligible R&D projects, such as contractor fees and materials expenses. They accrue these credits throughout the year and then submit a claim for them with their annual taxes. While the program offers generous support, the distance between when a company begins earning credits through expenditures and receives the financial benefits of the program can be more than a year. This creates lumpy cash flow for businesses, which is not conducive to keeping up with cash burn requirments.
Fortunately, Easly Advances allow businesses to use their earned refundable SR&ED credits to secure non-dilutive funding throughout the year. After a quick review process, companies can receive funds from Easly in as little as ten days after applying. Moreover, businesses can continue to draw down throughout the year as they accrue more SR&ED tax credits, further smoothing their cash flow without ceding equity.
Easly’s SR&ED financing is an essential source of non-dilutive funding for many businesses as it eliminates the need to give away equity or acquire burdensome loans. Instead, with Easly’s founder-friendly SR&ED tax credit advances, business owners can attain the financing they need while avoiding unattractive debt options and preserving the value and control over the business they’ve worked so hard to build.
Ready to Obtain Non-Dilutive Funding with Easly?
With many sources of funding available to startups and established businesses alike, finding the right mix of sources for your business can be complex. If your business qualifies for refundable SR&ED tax credits, you may be eligible for non-dilutive advances from Easly. By choosing to partner with the experts at Easly, your company can access the capital you need through your earned SR&ED credits as on-demand non-dilutive funding.
Contact Easly today to learn more about funding your startup and how you can get started with us.
