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A new source of undiluted equity is now available to businesses focused on research and development. It’s the sort of funding that could spark your next big project or give an existing one a final push over the line.

ForrestBrown’s new bridging finance prepayment service works by allowing high-growth SMEs to use their future research and development (R&D) tax credit as security to draw down funding as an uncommonly favourable loan.

Who is it for?

To be eligible for this bridging finance product, your business must be an SME in a period of high-growth and high-spend. Typically, this means companies that are investing heavily in research and development and want to fast-track their plans by extending their cash runway.

An SME (for the purposes of R&D tax credits) is defined as a company with fewer than 500 staff and either less than £100 million turnover or £86 million gross assets.

More detailed information about who is eligible for R&D tax credits can be found on our website page: What is an SME for R&D tax credit purposes?

Five reasons high-growth SMEs will consider this R&D bridging finance

  1. Improve cash flow when you are spending money on your R&D.
  2. Strategically accelerate investment in your team and products.
  3. Extend your cash runway to stretch the time between funding rounds.
  4. Prefer this to higher risk alternative funding options.
  5. Have an existing R&D project to push over the line.

Bridging loan R&D eligibility checklist

To be eligible, you need:

  • Up-to-date accounts.
  • No HMRC debt.

How does it work

This product is most useful for companies wishing to access a bridging loan against their current year R&D activity.

Successful applicants will be allocated a generous proportion of their expected R&D tax credit value. The sum can be drawn down on the projected R&D tax credit value generated in that period.

What to do next

To find out more about our R&D tax credit prepayment service, please contact our director Adam Kotas at hello@forrestbrown.co.uk or on 0117 926 9022.