R&D Tax Credit
An advance on an upcoming HMRC R&D Tax Credit refund
- You have done some R&D eligible under the HMRC SME Scheme, and
- You are currently loss-making, and either
- You are using an R&D Tax Consultant, or
- You have at least 3 years history of filing for R&D Tax Credit without it being contested or queried
An R&D Tax Credit advance can be used for a number of reasons:
- accelerate your growth
- delay an upcoming fund raising
- provide a cash buffer
There are usually no restrictions on the use of cash provided in an R&D Tax Credit advance.
There can be spending covenants tied to an R&D Tax Credit loan where the business must stay within strict spending pre-agreed guidelines. This is done to ensure the business does not run out of cash prior to the HMRC Tax refund.
We will also ask our or a third party's bank details are on the CT600 form in order to avoid agency risks. Finally, we will hold a fixed and floating charge over the business for the duration of the loan and will usually need to the senior-most lender.
Timing & Size
R&D Tax Credit can be issued up to 4 months ahead of the filing of a CT600.
The due diligence is relatively quick, with about a week being standard.
We will fund up to 80% of the R&D Tax Credit money spent to date. As we lend up to 4m in advance, it is possible to top up the loan amount as more money is spend on R&D during the year.
Establishment Fees: 3%
Interest Rate: 15%
Duration: Typically 6 months (3-4m ahead of filing + 2-3m for repayment)