Funding

[Andrew Miles]

Hi All, please find attached updated information relating to accessing a pre-payment funding facility for startups. 

 

R&D Capital Partners (RDCP) is a specialist financier that can provide startups the ability to use its current FYE June 2016 and/or 2017 R&D tax rebate prepared by your accountant as debt funding. Secured debt funding for up to OR over a year before the actual cash benefit can be claimed and received through the annual tax return system.

 

EXAMPLE:

 

1.      ABC Pty Ltd (ABC) FYE June 2016 45% R&D tax offset rebate = $180,000 ($400,000 claim). RDCP can provide up to $144,000 for a minimum of three months against this rebate.

2.      On a quarterly basis, RDCP can pay ABC against quarterly R&D incurred expenses for its FYE JUN17’s claim up to $144,000 (if the same as FY 15/16). If ABC uses the additional loan of $144,000 to undertake further eligible R&D activity within the FY 16/17, its eligible to claim this at an addition 45%. Hence, this increases the
FYE JUN 2017 claim to $544,000 from its $400,000 average thus increasing the rebate benefit.

 

Prepayment Features: 

·             7-10 day approval process – dependent on company financials and your accountant’s ‘opinion letter supporting’ the FYE JUN17 Refundable R&D tax claim.

·         Minimum 3 month loan period on amounts from $50,000 to $15m.

·         Cash is waiting to be used and NOT consigned out to a further secondary market.

·             Do NOT have to change from your R&D tax service provider/Accountant (i.e. Big4, external accountants or service providers, etc..).

·         Up to 1.25% monthly interest payments (short term quarterly loans).

·         Negotiable establishment fee (case-by-case).

·         No Directors guarantees (in most circumstances).

·         Multiplies your firm’s innovation dollar. 

 

Key BENEFITS: 

• Do NOT have to change from your R&D tax service provider/Accountant.
• Reduces need to raise capital at an early stage when valuations cannot be easily determined and investment risk is at its highest, hence pushing back the requirement of a larger dilution of equity for a less than optimal valuation.
• Keeps the founders focused on
• Increases spend and accelerates annual tech burn rate  
• Reduces or sometimes negates any need for equity dilution, some of our claimants are reaching revenue positions without any need to dilute or further dilute their equity by using the R&D debt finance to bridge them into revenue.
• Compliments the use of raising equity, some companies are using a mix of equity capital raising and R&D Tax prepayment debt finance to reduce the quantum of equity dilution in their business.
• Lengthens the client’s runway, provides the funding means by which a 45% claimant may reach their next major milestone against which a higher valuation can be achieved from an equity capital raising event.  
• Increases speed to market/ first mover strategy - by having access to prepayment debt finance the start-up can increase the speed in which it can build scale and stay ahead of competitors.
• Allows the founders the comfort of raising capital at the right time and price as opposed to being compelled to raise equity when the technology or concept is unproven.  

 

Regards

Andrew

 

 

 

 

 

 

 

Andrew Miles
Partner

Sydney, Melbourne, Brisbane

https://au.linkedin.com/in/andrew-miles-92b5537

Mo: 0431 162 212

Level 2, 349 Collins Street, Melbourne, 3000