Why claiming R&D tax credits is the best way to fast track your start-up

When considering funding for your start-up, the vast amount of options and processes can seem overwhelming. It can be tempting to bootstrap, get a bank loan, or try to take on the task of making research and development (R&D) tax claims alone.

However, preparing these claims by yourself exposes you to the risk of an audit and a lengthy process to secure the R&D payout. Whereas, utilising a specialised R&D firm is likely going to give you the highest funding return, with the least effort on your part.

R&D funding can be an absolute game-changer for an organisation. A successful R&D claim can be the difference between the project going ahead or not. The R&D claim needs to be carried out with expertise and care to give the venture the best opportunity for success.

Getting the most out of your R&D claim through a specialised firm can achieve the maximum benefits of claiming R&D tax credits.

Why are R&D tax credits so helpful?

R&D tax credits can be a great source of liquidity for a growing company, especially for companies that are pre-revenue or between funding rounds. Other types of funding such as bank loans may be still out of reach. Or like venture debts, may be too expensive.

Having accessed the funding, start-ups can expedite further R&D activities. This means that a company may be able to bring forward commercialisation plans, support further growth, delay unnecessary financing or equity injections and satisfy ongoing cash flow requirements. It basically means that the project can advance more quickly and can make use of more R&D activities to create a better product or service.

R&D firms have helped numerous companies secure anywhere from 50K – 200K to fund activities such as employee and contractor costs, computer and IT costs, vehicle expenses, equipment hire and internet hosting. Having these costs reimbursed allows the organisation to reinvest in the project quickly. It allows for a faster project launch and a well researched and tested product.

These tax credits are a non-dilutive capital option. When using R&D claims there is the ability to preserve the ownership of a company for a future occasion when the product is more mature and the most optimal valuation can be achieved.

R&D firms are specialists in finding the funding path that best suits your particular project, giving you the highest returns on your R&D spending. Whereas, accountants often do not have this specialist experience. Bootstrapping, as impressive and exciting as it may sound, often results in a slower launch time or less start-up capital produced. Using a firm allows you to achieve the best returns on your claim. It also allows you to focus on doing what you do best – running your company, refining your product or managing your people.