Simply put an R&D Tax Loan is a short-term loan against a business’s future tax credits. It is a new type of financial product that enables a company to use outstanding or future credits as collateral for an affordable loan.
Why apply for an R&D Tax Credit Loan?
Control over cash flow. Healthy cash flow can be the difference between success and failure in any business but is particularly important in a start-up or growing business. Utilising a loan means that a business can take control of its cash flow. An injection of cash can be applied at key points in a year matched to the needs of the business.
Accelerate growth. Having access to funds when you need them means that you can spend them when needed. This may be hiring the fight people or purchasing key products/software.
Protect equity. A loan can be an alternative to equity loans and investors.
Access to funds quickly. HMRC have recently significantly increased the time they take to process an application – it may take 2 to 3 months for the payment to reach you. A tax credit loan is much quicker – 2 days for the funds to be in your account.
Unlock working capital. A cash injection can free up working capital in the business.
Bridges finances. A tax credit loan can act as bridging finance between innovation cycles, enabling further control over your operational and R&D efforts.
An R&D tax credit tax loan gives businesses more control over their short-term finance, in particular cash flow, which is fundamentally important to any business.
How do I apply?
There are four key stages in applying for a Research and Development (R&D) Tax Credit Loan:
The first stage is to have a conversation with a member of our team. During the initial contact, the process will be explained in more detail, and we will check your eligibility for a claim.
If both sides are happy to proceed the next step is to apply for a loan and tax credit. This will involve the business going through our proprietary assessment of R&D claim’s compliance with the relevant legislation, due diligence, credit check, and history of tax claims.
The next stage is the credit review and a closer look at all documents provided. This leads to the preparation of loan documents and discussion and agreement on fees.
The final stage is the review and signing of terms and contracts. On completion of this, and submission of the claim to HMRC, funds will be transferred to your business via a bank transfer.
The application process outlined above typically takes no more than a week or two from start to finish. Typically, this is done together with finalising the R&D claim. Once the claim is submitted to HMRC, the funds can be in your account within 2 days, rather than the weeks or months that HMRC is currently taking to process applications.
Why Springboard?
As a principal lender, not a broker, Springboard Finance gives confidence to clients in our funding solutions.
The principals of Springboard Finance have over 40 years of combined experience in multiple forms of lending.
We have experience as funding managers lending against tax credits - we know the system.
Our collective expertise spans working in HMRC R&D tax credit team, property lending business and investment and asset management.
To support our review of each business and lending case, we work with a panel of experts including lawyers, accountants, tax relief experts and former HMRC employees, which together with our proprietary risk assessment, means maximising compliance and your peace of mind.
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