Entrepreneurs are self-sufficient individuals who enjoy a challenge and have the desire to succeed. A little help is often needed to maximize results. That’s why many entrepreneurs turn to the SR and ED grant program for help.
The Scientific Research & Experimental Development (SR&ED) grant program allows entrepreneurs and small business owners to pursue innovation. This funding can advance their business interests, turning creativity into something measurable. An entrepreneur needs an SR&ED tax credit because its financial support can be essential to long-term growth and success.
Let’s learn about all the reasons why entrepreneurs may need an SR and ED grant.
1. There Is Money Available
The best reason why entrepreneurs need an SR&ED grant is that it’s available. It’s akin to free money for something you may have gone and done anyway, in terms of innovating, exploration, and R&D. If there are SR&ED grants, why wouldn’t you want to take advantage of that?
You don’t need to be a research company or doing standard research to apply. Any entrepreneur, small business, or project can apply if it meets the criteria.
2. Reimburse the Costs of Innovation
An entrepreneur may have a creative idea that they do not know whether it will work. A product or a process. It needs to be hypothesized, tested, analyzed and explored to find out. That can take a lot of money to do.
SR&ED grants will not reimburse the full costs of innovation projects. Still, they provide a significant boost to one’s finances, with the ability to be used in various ways from a tax and accounting perspective.
3. It Challenges You to Push Forward
An SR&ED grant allows entrepreneurs to push forward, create, challenge themselves, and pursue the unknown. Keep a business up to date, and it requires new and innovative ideas to compete.
An entrepreneur doesn’t necessarily need to pay out-of-pocket to explore different products or processes so long as it falls under the SR&ED criteria. If you’re an entrepreneur who enjoys inventing and moving science or technology forward, you need the SR&ED grant.
You Can Get A Return on Unsuccessful Ideas
Unfortunately, in R&D and innovation, not every idea you try will be a success. Those that don’t pan out and become a new product or process typically don’t have a financial upside. They end up sucking up whatever money was invested in them, and then that’s gone.
With an SR&ED grant, you can use this funding source to get you closer to a break-even point on applicable projects that don’t work out as you’d hoped.
4. Succeed at the Highest Level
Developing an idea for a large marketplace can take a lot of money. While SR&ED grants do not cover marketing or this sort of expansion, in work it takes to develop a product or process provides needed financial resources to get you started.
For years, SR&ED incentives have allowed entrepreneurs to build businesses and launch projects, eventually spurring international expansions and global success.
5. You Gain a Competitive Advantage
An entrepreneur knows their competition. Starting, you may have few competitive advantages. However, you can gain those advantages with SR&ED grants and the product offerings or processes that develop from this program.
These improvements can help you make money, soar past the competition, expand to new territories, create new revenue streams, and more. In the name of remaining competitive, an entrepreneur would be silly not to consider SR&ED benefits.
6. You Grow Your Annual Profits
So many businesses and entrepreneurs struggle to break even in their first few years of operation. If you want to scale up or grow, the risks involved are extraordinary in some cases.
Using SR&ED grants, you run a much better chance of growing profits and market share and utilizing revenues in a more economically advantageous way than operational expenses. The more money you make as an entrepreneur, the more momentum you have and the more you can put into your business.
7. You Can Use SR&ED Grants as a Tax Credit
There are many ways to use SR&ED grants, including as refundable and non-refundable investment tax credits or ITCs. You can significantly reduce the cost of performing R&D through these tax credits, which can be applied to your corporate tax return in various ways.
Speak with an accountant familiar with SR&ED or an SR&ED consultant for a more in-depth discussion on how you can maximize your SR&ED grant.
8. You Don’t Need to Rely on Venture Capitalists
As an entrepreneur, you’re accountable to whichever party finances your business. If it’s a venture capitalist, you’re likely giving away equity of some kind. If it’s a bank loan, you’re tied up there.
SR&ED grants are a much cleaner source of funding and expand the list of possible financing solutions entrepreneurs can use to support their businesses. Also, you don’t need to give away any equity to do it. You retain full ownership of your project, product, and business.