Everything you need to know about bridging your SR&ED tax credit refund.
What is SR&ED financing?
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SR&ED financing (also called an SR&ED loan or SR&ED bridge loan) is a short-term loan secured against your company’s Scientific Research and Experimental Development tax credit refund from the Canada Revenue Agency. Instead of waiting 6–18 months for your CRA refund, you borrow against it now — typically up to 75% of the expected refund. The loan is repaid automatically when your CRA refund arrives.
How much can I borrow against my SR&ED claim?
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Alliance can typically arrange up to 75% of your expected federal and provincial refundable tax credit refund. For example, if your SR&ED claim is expected to generate a $400,000 refund, you could access up to $300,000 in bridge financing while CRA processes your return.
Do I need a filed SR&ED claim to qualify?
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No. Alliance works with both filed and pending SR&ED claims. If your claim has been prepared by a qualified SR&ED consultant and is ready to file, you can apply now. Lenders review the claim documentation to confirm the credit amount before advancing funds.
Which industries qualify for SR&ED financing?
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Any Canadian corporation eligible to file an SR&ED claim can qualify. This includes technology, software, biotech, pharmaceutical, manufacturing, cleantech, agri-tech, aerospace, automotive, and other R&D-intensive sectors. If your company spends money on research and experimental development, you likely qualify for both the SR&ED tax credit and SR&ED bridge financing.
How long does SR&ED financing take to arrange?
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Alliance delivers a funding decision within 48 hours of receiving a complete application. Once approved, funds are typically advanced within 5–10 business days — far faster than the 6–18 months CRA typically takes to process an SR&ED refund.
What interest rate will I pay on an SR&ED loan?
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SR&ED loan rates vary by lender and claim profile, but typically range from prime + 2% to prime + 6% per annum. Because repayment is tied to your CRA refund (usually within 6–12 months), total interest cost is modest relative to accessing capital now. Alliance’s 70+ lender network means we shop the market to find the most competitive rate for your deal.
How is an SR&ED loan repaid?
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SR&ED loans are self-liquidating: repayment comes directly from your CRA refund when it arrives. The lender registers a security interest on the SR&ED claim, and when CRA issues the refund, the loan principal and interest are repaid first. Any remaining balance is returned to you. Most borrowers make no out-of-pocket payments during the loan term.
Does my company need to be profitable to qualify?
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No. SR&ED financing is secured against the tax credit claim itself — not your profitability or general creditworthiness. This makes it accessible to early-stage, pre-revenue, and loss-making companies, which are often the most active SR&ED claimants. Lenders primarily assess the strength of the SR&ED claim, not your balance sheet.
What documents do I need to apply?
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A typical SR&ED financing application requires:
- Completed T661 form and T2 Schedule 31 (or draft versions if not yet filed)
- SR&ED consultant’s claim summary and technical report
- 12 months of business bank statements
- Recent financial statements or management accounts
- CRA registration confirmation and prior-year SR&ED history (if applicable)
Alliance will walk you through the full checklist after your initial application.
Can Alliance help if my SR&ED claim is under CRA review?
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Yes. Some lenders in Alliance’s network will advance funds on claims under CRA review, depending on claim size, documentation quality, and historical claim success. The advance percentage may be lower (50–60% rather than 75%) to account for review risk.
Contact Alliance to discuss your specific situation.
