Fast-track Your Growth With Advance R&D Funding
Whilst many businesses are aware of the R&D tax credit scheme, fewer know that they can get R&D Advance Funding, which gives you access to your future R&D tax credit up to 9 months before receiving the payment from HMRC.
Advance Funding can prove helpful for many businesses. By getting your future R&D tax credits months in advance, you can unlock working capital and reduce the strain on cash flow. Thus, allowing you to plan and reinvest back into your business at crucial times in the year, helping you meet your objectives and avoid any barrier
Receive your R&D tax credit early
‘R&D Advance Funding’ is a short-term loan on your future R&D tax credit. The advance can be against a future claim before you start the claim process, or it can be a loan at the point your claim is submitted (effectively skipping the wait time at HMRC).
With Advance Funding, you can receive funds up to 6 months before your year-end, which is when you submit your R&D claim. Since it can take HMRC up to 3 months to release the payment after a claim is submitted, you could have your future credit up to 9 months in advance.
The Benefits of R&D Advanced Funding
By drastically reducing the time it takes to receive your future R&D tax credit, you can move fast and reinvest funds back into your business.
Unlocking working capital and reducing the strain on cash flow enables you to plan and think strategically about investment decisions throughout the year. You can hire the right people at the right time, reinvest back into R&D efforts or even get your new product to market before the competition. It gives you that extended cash runway to grow quickly, avoid bottlenecks, and reach your business objectives.
The fastest way to get Advance Funding is through your R&D tax credit advisor. The reason for this is because they’ve already handled your claim, which speeds up the due diligence process. At EmpowerRD, our fastest claimant completed their claim and received their funds in 6 days and 2 hours.
We helped Guardapps, who create apps to protect children from online activity, receive R&D Advanced Funding 6 months before submitting their claim. Thanks to our speedy due diligence process and the trust of our partner, Guardapps received their funding in a matter of days. The fast turnover enabled Guardapps to continue developing their app and allowed them to avoid further equity dilution. They have now launched a beta version of their app in collaboration with a few schools, and they’ve started developing a new app.
Keep hold of equity
Many small to medium-sized businesses are cautious of debt funding, preferring to sell equity to acquire capital. However, R&D advance funding has been designed to help the likes of startups and scale-ups.
If your business is an SME investing heavily in research and development, Advance Funding is a great option. You can use your intellectual property, innovation, to get growth funding and continue your R&D efforts.
It allows you to keep hold of your stakes without having to sell shares. You don’t have to wait for equity rounds to close, and you don’t have to experience the high costs linked with early equity sales. With Advance Funding, there is no waiting time, and you can access the funds throughout the fiscal year.
Pre-Agreed Fixed Cost
Most providers are transparent about the cost of Advance Funding. They provide competitive interest rates and only require a one-off bullet payment at the end of the loan when the business has received its HMRC credits.
For most businesses, this is highly advantageous as you know precisely what you’ll be paying. You don’t have to pay monthly, which means you can plan, no resources leave the business, and it gives you the ability to reinvest your funds into the growth of your business.
Advanced Funding is designed to help businesses with their R&D efforts and this is reflected in the loan. Most providers know the obstacles and challenges that businesses face and are SMEs themselves.
At EmpowerRD, we’ve established favourable rates with multiple lending partners and can advance up to 80% of your R&D claim up to 6 months before your year-end. If this is something your business would be interested in, get in touch to speak to one of our experts.