Non-Dilutive Funding Options for Canadian R&D in 2024

With Q2 of 2024 well underway, businesses and organizations across Canada that are involved in innovation and R&D efforts are busy managing funds to fuel their efforts for the year. While there are multiple capital sources open to entrepreneurs and their teams, many options, like venture capital and angel investment, carry the cost of giving away equity. These dilutive funding sources may have their own set of benefits (mentorship, for example), but the upfront requirement to give up part ownership of your company can be detrimental depending on your goals, what stage of growth you’re in, and various other factors.

Non-dilutive funding, on the other hand, does not force businesses to relinquish ownership to obtain capital and can be highly beneficial to those who need financial support but do not wish to lose valuable stakes in their business. At Easly, we know that finding the right source for the capital needs of your project is essential for reaching successful research outcomes. Below, we’ll take a closer look at a few Canadian options for non-dilutive funding, as well as the benefit of SR&ED financing with our team. Read on to learn more.

The Scientific Research and Experimental Development Program (SR&ED)

The SR&ED tax incentive program is the largest source of government-funded financial support for research and development (R&D) in Canada and directly aims to support entrepreneurs in developing and researching new solutions to technological problems. SR&ED is a wide-reaching program, serving multiple industries and all kinds of businesses involved in R&D, from CCPCs to individuals or trusts.

The Government of Canada recognizes that supporting domestic innovation through tax incentives has several benefits both here at home and on the international stage and offers support by giving successful filers either refundable or non-refundable investment tax credits (ITCs), depending on their business type and size. The specific work that qualifies for SR&ED tax credits includes basic research, applied research, and experimental development, as well as expenditures that directly support these three categories.

Learn more about who qualifies for SR&ED here.

Federal Grants

SR&ED has become a well-known program, but it isn’t the only incentive the Government of Canada offers businesses engaged in research and development. There is a wide range of grant options available, with some being reserved for specific industries or applications and others focusing more on specific activities or objectives. One such grant that those involved in R&D should be aware of is the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) Project Grant.

NRC IRAP aims to support small and medium-sized businesses pursuing innovation and offers advisory services, valuable connections, and funding to help remove the many roadblocks that can otherwise hinder your operations.

To qualify for NRC IRAP, businesses must be incorporated within Canada, have a maximum of 500 full-time employees, and the business itself must be focused on creating (and marketing), innovative and technology-driven products, services, and processes domestically.

Learn more about IRAP here.

Provincial Grants and Programs

The Federal Government isn’t the only entity that offers funding assistance and incentives to businesses. Most provinces offer their own programs and incentives centred around various forms of innovation. It is important to know what is available in your area specifically, what qualifications are necessary for each available source, and how provincial and federal programs may be leveraged to your benefit. It can often be helpful to use a dedicated consultant who specializes in R&D funding opportunities and to stay on top of evolving provincial incentives.

Learn more about provincial innovation incentives here. 

Non-Dilutive Funding With Easly

Filing an SR&ED claim is a great way to support your R&D efforts, but, as with most financial incentives, there are a few considerations to be aware of. The program only provides refunds on an annual basis. This means that your business incurs costs throughout the year but can only claim them for reimbursement annually. Partnering with a non-dilutive financier like Easly can help you accelerate your funding timelines. Our team is proud to partner with innovative companies that claim refundable tax credits by providing SR&ED financing. We make SR&ED advances easy. Check out our Easly calculator to see the cash flow you may be eligible for, as well as our SR&ED calculator, which helps you determine your estimated tax credit refund amount.

Contact us today to learn more about non-dilutive funding options and our services for SR&ED filers across Canada!