Estimate Your SRED Advance with Easly’s Cash Flow Calculator

Canada’s Scientific Research and Experimental Development (SRED) tax incentive program offers both refundable and non-refundable tax credits for eligible innovations. The SRED program has long been a vital resource for businesses conducting research and development (R&D) related activities. The federal program provides tax credits for eligible SRED expenses, which include items such as overhead costs, equipment, or salaries for relevant personnel. Most provinces also provide additional tax credits on top of the federal portion. In this way, SRED offers significant financial support for companies pursuing R&D and helps Canadian businesses recoup a substantial portion of eligible R&D costs.

Eligible projects must further scientific knowledge, whether or not there is a specific practical application in mind. The intention of the program, as well as its size, continues to elevate Canadian innovation. The SRED program provides nearly $4 billion in tax credits to more than 20,000 claimants each year, most of them being small businesses. The program is pivotal in supporting innovation and continuous scientific development.

Easly’s mission is to empower Canadian businesses by facilitating early access to the cash available through their SRED tax credits, helping them overcome the challenges of cash flow associated with the program’s annual reimbursement schedule. For businesses interested in claiming SRED tax credits in Canada, Easly can provide SR&ED financing and offer an advance on their accrued SRED credits to date.

Read on to learn how you can calculate your Easly cash flow potential through SRED financing, as well as some simple SRED examples you can try with Easly’s cash flow calculator.

How much does SRED cover?

Research and development can be costly, and businesses are often heavily invested in these activities – even with no guarantee of the outcome. The SRED program acknowledges the importance of R&D and alleviates some of the financial pressure associated with this type of work. By providing tax credits for eligible R&D expenditures, the Canadian government incentivizes businesses to continually innovate and garner a greater competitive edge in the global market.

In addition to meeting eligibility requirements and documenting activities, companies should take other factors into consideration as well. Canadian Controlled Private Corporations (CCPCs) are private companies owned and controlled by resident Canadians. CCPCs can claim a refundable investment tax credit (ITC) from the federal government of up to 35% of eligible SR&ED expenses to a maximum of $3M. Other companies, both public and private, can claim a non-refundable ITC of 15%.

For companies engaged in R&D in Canada, SRED tax credits open up a wealth of opportunities. Not only are businesses reimbursed for their expenditures, but they are also entitled to use their SRED refund as they see fit. This refund can be allocated to ongoing projects, hiring essential personnel, investing in strategic initiatives, or pursuing other activities critical to business growth.

Easly’s Impact on Canadian R&D

While SRED tax credits are a vital source of financial support for Canadian businesses, they come with a caveat: they are reimbursed as a lump sum annually and only after you’ve submitted your claim. This process can be time-consuming and leaves a gap of up to 18 months from when expenses begin to incur to when reimbursement is received. Since R&D endeavours usually don’t have immediate returns, cash flow challenges often arise.

Fortunately, Easly has a strong track record of supporting Canadian R&D initiatives through our Capital-as-a-Service (CaaS) platform. To date, we’ve facilitated over $185 million in SRED advances, offering a valuable source of non-dilutive capital to companies on their schedule, not the CRAs. We provide financing for individual SRED claims ranging from $50,000 to over $2,000,000, giving businesses the financial flexibility they need to keep their projects moving forward.

Easly prides itself on providing founder-friendly, non-dilutive SRED advances with terms that don’t require personal guarantees or have hidden fees. Our application and approval process is designed to be approachable and repeatable, ensuring you can access the capital you need when it matters most.

With the help of Easly’s cash flow calculator, you can quickly see an approximation of the cash flow available to you through SRED financing.

Tap Into Your Earned SRED Credits with Easly

Easly is your trusted partner in SRED financing. By advancing your earned SRED tax credits, our Easly Advances ensure you have the funds you need when you need them most. With our support, you can confidently drive your R&D projects forward without concerns about cash flow disruptions.

Additionally, when working with Easly, you can get an advance on your SRED credits before you file your claim. It’s all about giving you the financial flexibility to drive your R&D initiatives with confidence.

So don’t wait for your annual SRED refund—take advantage of Easly’s SRED advances and gain control over your funding timeline. Contact our team today to learn more about how Easly can empower your R&D initiatives.