By providing SMEs with direct lending solutions secured by cash tax rebates due under the R&D
Incentive Scheme, investors can generate strong returns with an attractive risk profile.
As Australia transitions from a mining lead economy, it is positioning itself as the “Innovation Nation”
A key component of this strategy is adequate investment in research and development (R&D) for SME companies.
By providing SMEs with direct lending solutions secured by cash tax rebates due under the R&D Incentive Scheme, investors can generate strong returns against an attractive risk profile.
Mitchell Asset Management
Mitchell Investment Management
Secured Debt
10%+ (net of fees)*
AUD $25,000
R&D spending is actively encouraged by the Federal government via its R&D Tax Incentive Scheme.
R&D tax incentives have a strong history, with Australian R&D companies benefiting from such incentives since 1985.
Eligible SMEs can qualify for a 43.5% refundable cash offset and there are more than 11,000 SMEs registered for the R&D Tax Incentive.
The actual cost to the Federal budget was estimated at $3bn in FY13/14 and is expected to grow to $3.5bn by FY17/18.
R&D spending is actively encouraged by the Federal government via its R&D Tax Incentive Scheme.
R&D tax incentives have a strong history, with Australian R&D companies benefiting from such incentives since 1985.
Eligible SMEs can qualify for a 43.5% refundable cash offset and there are more than 11,000 SMEs registered for the R&D Tax Incentive.
The actual cost to the Federal budget was estimated at $3bn in FY13/14 and is expected to grow to $3.5bn by FY17/18.
R&D spending is actively encouraged by the Federal government via its R&D Tax Incentive Scheme.
R&D tax incentives have a strong history, with Australian R&D companies benefiting from such incentives since 1985.
Eligible SMEs can qualify for a 43.5% refundable cash offset and there are more than 11,000 SMEs registered for the R&D Tax Incentive.
The actual cost to the Federal budget was estimated at $3bn in FY13/14 and is expected to grow to $3.5bn by FY17/18.
While the R&D cash tax rebate is a very effective incentive, SMEs involved in R&D still face a possible cash flow squeeze.
Timing considerations when filing tax returns can often mean SMEs wait months before receiving R&D rebates due.
SME options to alleviate this R&D cash flow squeeze are often costly and bring onerous conditions and/or risk.
By utilizing cash rebates as security for direct lending, the Innovation Finance Fund offers a realistic alternative for SMEs and allows investors in the Innovation Finance Fund to capture the premium available.
Once an SME has a confirmed registration for qualifying R&D expenditure, the obligation to pay a tax refund lies with the Commonwealth of Australia – a Sovereign Credit Rated entity.
The credit underwriting and approval process is largely objective with eligibility for registration determined via a strict set of criteria.
The Innovation Finance Fund will use only registered R&D specialists when determining SME eligibility for R&D rebates. Further, the Innovation Finance Fund mandates documented security over the R&D rebate while maintaining control over the bank account into which cash rebates are deposited.
These objective risk parameters, use of R&D experts and strong security structure all serve as active risk mitigants and assist in maintaining investor returns.
Mitchell Asset Management
Level 2, 414 Toorak Road
Toorak, Victoria 3142
Australia
Telephone: (03) 9826 0003
iff@mitchellam.com
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