SR&ED Financing: Prefinance your tax credits

Prefinance your tax credits

If you have cash flow needs, here is a way to finance your R&D.

Through this program, Investissement Québec offers businesses eligible for federal and provincial refundable SR&ED tax credits a guaranteed repayment of the net loss on loans obtained from a financial institution.

In other words, the government guarantees an advance on the estimated future R&D tax credits receivable, giving companies better cash flow while carrying out their projects.

How much can we get?

Interim tax credit financing (the loan) can reach 75% of the refundable tax credits receivable, with guaranteed repayment on the net loss by Investissement Québec reaching up to 80% of this loan.

Eligible expenditures: salaries, subcontracting, equipment, materials, and overhead (same as the SR&ED program).

For how long?

Interim tax credit financing can be requested for one or two fiscal years. Loan disbursements are usually made quarterly while the business is carrying out its R&D project.

When credit repayments are issued by the Canada Customs and Revenue Agency and Revenue Québec, these amounts are first assigned to loan repayment.

What is the procedure?

• Businesses with a history of R&D credits can apply at any time.
• Businesses without prior R&D credits must first obtain an official opinion from the Canada Customs and Revenue Agency through a Preclaim Project Review (PCPR).
• You must also inform your financial institution of your intention to apply.

How can Emergex help us?

Emergex Subsidies can assist you throughout the process by:

• Preparing a complete file in compliance with program criteria
• Following through on the financing request
• Providing technological preparation for the Preclaim Project Review (if required)