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What are R&D Tax Credit Loans?

What are R&D Tax Credit Loans?

Here at Swoop, we love uncovering the numerous and varied funding options available to support small busineses. A particular favourite right now is a relatively new type of funding – R&D tax credit loans.

The team here at Swoop has seen a significant increase in the number of calls from companies experiencing delays in receiving R&D payments from HMRC. We understand how these delays in predicted funds into an SME can have major knock-on effects.

What are the benefits of R&D tax credit loans

Swoop works with a number of providers who are able to advance funds against your R&D tax claims. The providers we work with all have different criteria, so our system will assess the most suitable option for you and your business. The benefits are numerous:

  • Low risk, so attractively low rates
  • Fast and efficient service 
  • We generally make introductions the day we receive your enquiry 
  • History of claims increases lenders’ appetites to advance earlier – so future benefits
  • No charge from Swoop

Am I eligible for R&D Tax credit loan?

To be eligible for an R&D tax credit loan you must, of course, also be eligible for an R&D tax relief. You are eligible if your SME has:

  • fewer than 500 employees
  • a turnover of under €100m or a balance sheet total under €86m
  • based in the UK
  • has a significant amount of R&D expenditure – according to HMRC, R&D for tax purposes is a project which “seeks to achieve an advance in science or technology”. R&D is still deemed to have taken place whether or not the project goes on to be successful; it’s the attempt that counts.

For more information on R&D tax credits read our blog R&D tax credits simply explained by Swoop.

What type of small business is best suited to R&D tax credit loans?

This type of funding solution is especially suitable for small businesses with a need to access funds from their R&D claim immediately in exchange for paying an interest rate – rather than waiting for the claim to be processed. As we know, HMRC can take months to process these claims.  

Also, for a small businesses in its early stages where alternative funding options are more limited due to cost, this is an obvious choice. 

R&D tax credit loans are also perfect for the small businesses looking to avoid equity funding and giving away shares in their company. 

What is the key benefit of a R&D tax credit loan

Although R&D tax credits are a great way of funding your business and getting expenditure back in the form of a tax credit, there is one major issue which the R&D tax credit loan solves – the speed at which the funds can be accessed. When making your R&D claim you need to wait until your company’s financial year comes to an end before you can prepare the accounts and file for the R&D tax credit. Once the application is submitted, you must then wait an additional 6-12 weeks for the R&D tax credit to be processed and paid by HMRC. 

However, with the R&D tax credit loan, the length of the process is heavily reduced. On average, it takes around 2-4 weeks from the first conversation with the lender to the loan agreement. 

Apply for funding now

If the R&D tax credit loan sounds like the perfect type of funding for your business, then contact the team at Swoop and we will happily assist you on your funding journey, and match you with the best loan providers in the UK. 

Click here to get registered with one simple form.

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