Our Guide to R&D Tax Credit Loans

What are R&D tax credit loans?

R&D tax credit loans are based on the R&D tax credits scheme set up by the government to support more innovation in the UK. They provide a way to access a percentage of your tax credits paid in advance so that your business can use this vital funding source when it’s needed the most, as opposed to waiting for the payment to be made. This additional working capital can provide vital support for many businesses and take the pressure off your cash flow.

You have probably heard of the R&D tax credits scheme – you may even have already made a claim under it. For businesses that are investing in innovation, the scheme provides key support through claims that allow for up to 33% of R&D costs to be recouped. There are huge advantages to making an R&D tax relief claim an annual part of your enterprise’s processes if you are an innovative business with an R&D budget. However, there is one obstacle for many organisations, and that’s the amount of time it can take to receive the payment relating to the claim – up to nine months in some cases.

How do R&D tax credit loans solve this problem?

By giving you access to the payment early. The period between building the claim for R&D tax credits and actually receiving payment can be very long. This is especially so as more and more businesses look to take advantage of the increasingly beneficial structure of the scheme. As that time passes, your organisation may be under financial pressure that could be eased by receiving the payment earlier – or missing out on opportunities due to problems with cash flow. What R&D tax credit loans do is provide you with the payment that is due under your claim early so that you don’t have to wait for it, and you can start using it in your business now.

Reinvest your business when it needs it the most

Cash flow is vital to any enterprise, and it can be really problematic if this stalls. Having a reliable source of investment can make all the difference in growth. R&D tax credit loans make the financing you can get via R&D tax credits much more accessible because the payment can be made to your business up to nine months in advance. That’s nine months to avoid cash flow struggles and instead put resources into more innovation and growth. Once you’ve received an R&D tax credit loan, when the payment comes in from HMRC, you’ll be required to use this to pay back the loan. R&D tax credit loans are essentially a quick and effective form of debt financing that takes the worry out of borrowing.

The SPRK Advance

If your business is making a claim for R&D tax credits, it makes sense to look into whether you could receive any payments sooner through R&D tax credit loans.

Our R&D tax credit loans, a ‘SPRK Advance’, can support you with access to capital on either an ad hoc or quarterly basis – it’s entirely up to you and what works best for your business. The process is easy, fees are straightforward, and you have even the chance to make your R&D funding go further.

SPRK will receive the advanced amount directly from HMRC once your claim is processed, removing any debt against the loan; you can apply here.

More recent posts:

  • R&D Tax Credits

    Where to Start with Your R&D Tax Credit Application

    What are R&D tax credit loans? R&D tax credit loans are based on the R&D tax credits scheme set up by the government to support more innovation in the UK. They provide a way to access a percentage of your
    Read more
  • Innovation Term Loans

    Is Venture Debt Appropriate for Innovation Funding?

    Venture debt is a specialised form of debt financing geared towards venture-backed companies that may not yet be profitable but show high growth potential. It's typically provided by specialised banks or non-bank lenders and is structured as a term loan or revolving credit facility.

    Read more
  • R&D Tax Credits

    Leveraging R&D Advance Funding for Better Cash Flow

    Maintaining a robust cash flow is as challenging as it is critical, especially when venturing into the territories of research and development (R&D). R&D advance funding is a strategic financial tool designed to alleviate the pressure on your cash reserves and fuel your innovative projects.

    Read more
  • Information

    From Tax Reliefs to Tech Reforms: Our Analysis of R&D Changes in 2023

    As the innovation space continuously evolves, Research and Development (R&D) tax reliefs in the UK have been a consistent ally for companies pushing the boundaries of innovation. The year 2023 has held significant shifts in these reliefs, marking a pivotal moment for businesses involved in R&D activities.

    Read more
  • R&D Tax Credits

    R&D Tax Claims: Insider Tips to Maximise Your Claim

    Businesses making an R&D tax claim have the potential to receive transformative funding. However, it’s not always an easy process. The application can be complex and requires precision, and HMRC has recently cracked down on those R&D tax claims that contain ineligible projects, even by mistake.

    Read more