To compete successfully in the global business environment, you must stay innovative and advance within your profession. Small businesses, in particular, must stay updated and generate new and unique ideas to compete on a global level with other small businesses and big organizations. The big problem for any emerging organization is funding but do you know Scientific Research & Experimental Development (SR&ED) tax credit program was created by the Canadian government to help small enterprises across the country. Businesses can profit from the SR&ED tax credit in a variety of ways.
The SR&ED investment tax credit (also known as shred credits) is a CRA incentive program that allows businesses to claim 35 percent or more of their qualified expenditure as a tax reduction or a cash payout. Cash refunds for CCPCs can be more than 55 percent of spending when provincial programs and overheads are taken into consideration. If you need to pay for R&D without breaking the bank then follow the steps highlighted below.
Sr&Ed Tax Credit Loan
An SR&ED tax credit loan is a novel financial tool that allows a firm to borrow money using its future SR&ED tax credit refund as collateral. Every year, the SR&ED tax credit provides a reliable source of operational capital for many Canadian businesses. Though it has been trustworthy for years, one of the scheme’s issues is that financing takes a long time to arrive. Many businesses find up waiting for CRA for several months, sometimes even a year. They can get that cash in a matter of weeks with SR&ED Finance. You may grow faster than your competitors and gain an advantage with a new funding timeframe.
Grants And Tax Credits
The Scientific Research and Experimental Development (SR&ED) Tax Credit program is Canada’s single greatest R&D incentive. On the first $3 million in qualified expenses, such as salary, capital, consulting fees, and materials, Canadian businesses can claim a 35 percent investment tax credit. For amounts greater than $3 million, the tax credit is 15%. For the most part, these credits are given in the form of a cash refund.
Apart from Prince Edward Island, Nunavut, and the Northwest Territories, every province and territory, except Prince Edward Island, Nunavut, and the Northwest Territories, offers a tax credit for approved SR&ED undertaken in their jurisdiction.
Grants and industry-specific government initiatives are also available from the federal government and provinces.
Collaborate With Universities And Research Institutes
Your organization may be able to collaborate on certain initiatives with a post-secondary university. The Natural Sciences and Engineering Research Council (NSERC) offers a variety of initiatives that allow you to interact with these institutions for half of the project’s cost or an in-kind contribution.
If you’re interested in applying for the Research Partnerships Program, the first step is to contact NSERC. You’ll also need to select a researcher or research institution with whom you’d like to work.
Another popular program is the National Research Council’s Industrial Research Assistance Program, which connects specialists in towns around the country to provide advice, technological expertise, and research funding.
If you work in the health industry, the Industry-Partnered Collaborative Research Program of the Canadian Institutes of Health Research may be able to help you partner with research institutions on health R&D. For this program, the maximum grant is $250,000 per year for a total of 5 years.