Australian technology companies invest heavily in product development, engineering and innovation long before they see the benefit of that spend returned through the government’s Research and Development Tax Incentive (RDTI).
The challenge is timing.
Most businesses wait 9 to 12 months between incurring eligible R&D expenditure and receiving their tax refund. For high-growth companies, that delay can create a real cash flow gap.
R&D tax loans solve that problem by allowing businesses to access a portion of their expected refund earlier.
Rather than waiting for the ATO payment, companies can unlock capital they’ve already earned and reinvest it into further R&D initiatives or use it to smooth short-term cash flow needs.
What is an R&D tax loan?
An R&D tax loan is a short-term funding facility secured against your expected R&D tax incentive refund.
A lender advances capital based on the value of your expected claim, then gets repaid once your refund is received from the ATO.
At Mighty Partners, businesses can access:
- up to 85% of their expected claim
- facilities from $500k to $5m
- monthly, quarterly or annual drawdowns
- repayment once the refund is received
- no equity dilution
Unlike traditional venture debt, these facilities are structured against a known government entitlement rather than future revenue assumptions.
Why companies use R&D refund financing
For many growth companies, the issue is not whether they will receive the refund.
It is whether they can afford to wait.
Common use cases include:
Continuing product development: Engineering teams do not stop building because the refund is delayed.
R&D finance helps companies continue shipping product while waiting for tax credits to land.
Smoothing working capital: Many CFOs use R&D finance to smooth timing mismatches between expenditure and reimbursement.
This is especially relevant for companies making large upfront investments in engineering teams.
Funding current year R&D spend: Some lenders can finance current year expenditure on a rolling basis rather than waiting until year-end.
Mighty Partners can lend against year-to-date expenditure, meaning businesses do not need to wait until 30 June to access capital.
How the process works
Step 1: Confirm eligibility
Your business typically needs to
- be registered in Australia
- be eligible for the R&D Tax Incentive
- have qualifying R&D expenditure
- be registered with AusIndustry
Step 2: Estimate your claim
Your tax advisor or R&D consultant estimates the likely refund amount.
This forms the basis of facility sizing.
Step 3: Receive funding
The lender advances a percentage of your expected refund.
At Mighty, this is up to 85 percent.
Step 4: Receive your ATO refund
Once your refund lands, the facility is repaid.
Three common R&D loan structures
R&D finance vs venture debt
R&D finance is typically:
- shorter term (6-12 months)
- tied to your refund
- designed for working capital and product spend
Venture debt is typically:
- larger facilities
- longer term (1–3 years)
- used for broader growth initiatives such as hiring, acquisitions or expansion
Who is a good fit?
R&D finance is typically suited to businesses that:
- invest heavily in product development, engineering, innovation or technical research across sectors such as technology, healthcare, advanced manufacturing, energy and other R&D-intensive industries.
- have previously submitted a successful AusIndustry claim and received an R&D Tax Incentive refund (while not a strict requirement, prior claims generally make underwriting faster and simpler).
- are seeking non-dilutive capital to smooth cash flow, continue investing in R&D or bring forward capital already earned through the RDTI program.
Final thought
For many growth companies, the R&D refund is treated as something to wait for.
In reality, it can be an active part of your capital strategy.
If your business is investing heavily in R&D and waiting on a meaningful refund, bringing that capital forward can create flexibility without diluting ownership.
