Don’t Forget the Grants
Published on Friday, 16 August 2013 11:46:36 Written by Marc
So you’re in charge of a capital planning involving a capital expenditure purchase. Your company or organization is anxious to get the capex approved as they anticipate it will be the source of great savings and more efficiency. You spend hours, days finding the right product with the right specs at the right price and with an acceptable delivery schedule. But wait, have you forgotten about possible government grants or credits? When preparing a capital expenditure (capex) purchase, most companies and organizations are often quick to get the capex request approved. . However, in the rush, unfortunately many companies forget valuable help that they can sometimes get in the form of a grant or credits. They come in many forms: from a utility company for a portion of the capex that deals with energy reduction, a credit for improvement or research and technology provided by a governmental organization, for training personnel on a new piece of equipment. All in all, when planned in advance the grants and credits can really add up. The idea is to have a culture of making it a habit to go after the grants and credits from the on start. It is interesting to talk to people in business units and mention to them that for their new equipment capex they could receive a grant for the energy reduction that the new equipment will generate. People often only consider see the main benefits when analyzing a capex. If it is for a new piece of equipment, they will recognize the added sales they can bring in, or the reduction in staffing, or increased efficiency overall. But speak about energy reduction and often they did not think about it. Then go deeper and mention possible carbon credits and some start to scratch the back of their head. Moreover, what about credits for research and development?
- Huh? Research and what? We are simply buying a few new machines to improve the output.
- Yes, and did you need to do some research or were all machines already sold ready to work?
- No, of course, we needed to figure out what we needed, we did some trial and error for months before we understood our problem and then find out what we needed, some of the equipment we are buying is not even really sold for that main purpose.
- So, you are saying that you did some research, by trial and error into finding a new solution with new type of equipment?
- Yeah, it’s about that.
- So, you should inquire about potential tax credits related to research and development, it’s worth a try.
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