The table below compares loan disbursement schedules and their respective impact on the amounts paid out over time:
|FINALTA CAPITAL||Financial and government institutions1|
|Financing percentage||The financing percentage is usually from 75% to 85%, and up to 100%, for SR&ED tax credits, from 85% to 95%, and up to 100%, for e-business, multimedia and other tax credits and from 75% to 85%, and up to 100%, for government grants.||75% of the requested tax incentive. Terms may vary.|
|Number of disbursements||4 disbursements each representing 25% of the loan amount.||5 disbursements each representing 20% of the loan amount.|
|Disbursement frequency||On the first day of each quarter of the fiscal year, in anticipation of eligible expenditures.||Following production of quarterly financial statements2 once eligible expenditures have been executed.|
|Holdback||No holdback or reserve.||20% of the authorized loan amount is usually withheld until the tax incentive application has been filed, i.e. 4 to 6 months after the end of the fiscal year.3|
|Release of full loan||100% of the loan amount is disbursed by the first day of the fourth quarter, i.e. before the end of the fiscal year.||100% of the loan amount is disbursed after the tax incentive application has been filed, i.e. from 4 to 6 months after the end of the fiscal year.|
To calculate the average outstanding loan balance, the comparison assumes that:
1) Borrowers apply for tax incentives on average three months after the end of the fiscal year.
2) Tax incentive refunds occur on average: (i) two months after applying to the Canada Revenue Agency for federal SR&ED tax credits; and (ii) four months after applying provincial tax authorities for provincial SR&ED, e-business, multimedia or other tax credits.
1 The comparison is based on publicly available information along with our understanding of the loan terms offered by financial and governmental institutions.
2 The comparison assumes a 30-day period for producing quarterly financial statements and receiving the related loan disbursement. As a result, loan instalments from financial and government institutions are disbursed approximately four months later than those from FINALTA CAPITAL.
3 The total amount of a financial institution or government loan is received approximately 7 to 9 months later than with FINALTA CAPITAL.