Small businesses often find cash flow to be a significant challenge. Yet those same businesses may not be taking up options that can help improve their cash flow situation. Many countries offer research and development tax incentives yet there are a lot of companies that are eligible to claim for these, but do not. If your company is carrying out research and development as defined by the scheme in your country, then you should consider submitting a claim. However, one of the challenges with getting this cash benefit is that it can sometimes take months to actually see the money. In this case, R&D cashflow funding could prove to be a massive help for your business by giving you access to that cash much earlier on.

One of the most helpful uses of R&D cashflow funding is exactly that – it can help businesses, and particularly small businesses, address cash flow issues more effectively. This can make it much easier to manage money within the business. When a business knows exactly the cash it will have, this makes it much easier to plan ahead. It also helps with avoiding getting into situations of financial difficulty and failing to pay bills. For this reason, getting access to R&D cashflow funding can be helpful both for cash planning purposes, as well as for maintaining the company’s reputation with its suppliers. Getting access to cash in this way can also increase buying power with suppliers, providing access to better terms.

One of the great advantages of R&D cashflow funding is that it allows businesses to gain access to R&D cash owed to them before they might otherwise be able to get hold of it, which in turn allows research and development activities to continue. In some cases, businesses find that their cashflow situation is so tight, that R&D projects have to be put on hold, while they await the refund of cash from government agencies based on R&D tax incentive claims made. For businesses in some industries this can be absolutely critical, especially in situations where being the first mover is essential to taking control of the market. Not investing in R&D at a key moment can ultimately even make the difference between company success or failure. R&D cashflow funding can alleviate these sorts of issues.

For some companies, R&D cashflow funding can give them access to a line of credit that they simply would not be able to access elsewhere. In the UK, figures show that more than 50% of small businesses have had a loan application rejected. Meanwhile, in Australia small businesses are twice as likely to be rejected for loans as medium sized ones. This can make it very difficult to gain access to much-needed cash to grow the business. For companies that are undertaking R&D, this type of cashflow funding can provide the ability for a company to get the cash it needs.

There are many reasons why R&D cashflow funding can be helpful to businesses of all sizes, but particularly for small and medium sized businesses which may have greater difficulties with cashflow due to their small scale. This makes R&D cashflow funding an extremely helpful approach to consider.