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What is the use of availing the R & D tax credit loan?

July 28, 2016 | Author: | Posted in Taxes

Australian companies which are working on Research and development projects can consider getting a grant from the Australian government. This incentive is called the R & D tax credit incentive. The R &D Tax loan is another simple aspect of this huge R & D Tax credit incentive which was started by the Australian government to help companies that are working on research activities. To know more about the R & D Tax loans, you need to know what R & D tax credit incentive is. Read on to find out all you need to know about this incentive.

What is R & D Tax credit?

When your company is working on research activities, there is a lot of uncertainty involved. There is a lot of capital expenditure too. To cover the risks and to encourage such research activities, the Australian government along with the AusIndustry and ATO (Australian Tax office) has come up with the initiative of providing a credit in the form of monetary benefit to such companies.  By availing this facility, your company would be able to run the business smoothly without having to think about capital raising.

What is R & D tax finance?

Since there is a lot of uncertainty involved, there are now a large number of companies which are ready to invest in your R & D activities. These companies provide the required finance to run your research activities.  This type of finance is provided to both listed and unlisted companies. There are some terms and conditions associated with this type of funding and it purely depends on the kind of research activities that your company undertakes.

R & D Tax loans

Funding of your research activities through R & D tax finance is with a loan agreement. The R & D Tax loans are thus a debt instrument that is provided to your company by external financing institutions. The investors get into a secured loan agreement.

The general terms of this loan is to make sure that your company repays the loan with the help of the R & D tax credit that will be received from the government through the R & D tax incentive program. This type of R & D tax loans helps the companies to take the research and development activities to the next level.

Eligibility criteria

To avail the loan, your company/project should be working on research and development activities which will result in product that will help the larger section of population. The project/company must be registered annually with the AusIndustry (who act on behalf of Innovation Australia).  Generally, financing companies which provide this type of R & D tax loans are interested in financing only technology related research activities. If your company is developing any new machines, prototypes, software’s for the welfare of the larger masses and not commercial in nature, your company can still be eligible for this tax credit which is provided by the ATO – and hence it could also avail the R&D tax loan.



Swanson Reed, a R&D tax advisory firm in Australia, helps companies involved in research and development activities claim R&D tax incentive and avail tax loans. To learn more about us, visit

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