The Quick Version
- Your first R&D loan doesn’t have to be your last for the financial year
- As eligible R&D expenditure grows quarter by quarter, so does the amount you can potentially borrow against
- Repeat R&D loans let you draw down additional funding as new costs are incurred — not just the spend you had when you first applied
- The R&D Tax Incentive remains a government process, and the rebate still arrives through the usual ATO channels
- Existing clients often find second and third drawdowns faster and simpler, because the lender and R&D advisor already know the business
Three months ago, you were facing a cash flow gap that risked slowing your product roadmap. Your R&D Tax Incentive refund was still months away, while eligible spend continued to build. So you did the smart thing: you took out an R&D loan against that accrued expenditure and put the capital straight back into development.
The pressure eased, hiring stayed on track, and prototyping didn’t skip a beat.
But that was Q1. Since then, your team has kept building. Contractors have been invoiced for the next phase. Cloud infrastructure bills have scaled with the product. Developer salaries have been landing in the ledger every fortnight. And all of that new activity has been generating fresh eligible R&D expenditure that your original loan didn’t account for, because it hadn’t happened yet.
Which raises a question nobody seems to ask: can you go back for more?
The short answer is yes. The longer answer is what this article is about.
Why Most Businesses Stop at One Drawdown
The assumption is understandable. The R&D Tax Incentive operates on an annual cycle. Financial year ends, you register your activities with AusIndustry, lodge your tax return, and eventually the ATO sends the rebate. Everything about the program’s structure signals “once a year.”
So when businesses think about borrowing against that rebate, they mirror the same rhythm: one loan per year, settled when the refund arrives, and that’s the end of it.
But that framing confuses the government’s timeline with the lender’s. Specialist R&D lenders don’t calculate your borrowing limit based on a forecast of what you’ll spend over twelve months. They lend against year-to-date eligible R&D expenditure that’s already been incurred and is sitting in your accounting system right now. Note: Rocking Horse does not assess R&D eligibility or provide tax advice. We rely on your R&D tax advisor to confirm eligible expenditure before any funding is provided.
Think about what that means in practice. If you borrowed in October based on your July-to-September spend, and then kept investing in R&D through December, your eligible expenditure pool has expanded well beyond the number your first drawdown was based on. The borrowing base has grown organically. And a second drawdown against that new capacity becomes a real option.
How many businesses are we talking about? The most recent ATO R&D Tax Incentive transparency report (covering 2022-23) shows 12,956 Australian companies claimed a combined $16.2 billion in eligible R&D expenditure. Close to half of those claimants were small businesses with turnover under $10 million, and the vast majority sat below the $20 million threshold that qualifies for the refundable offset. These aren’t businesses burning through their entire R&D budget in a single quarter. They’re spreading it across the year, payroll by payroll, invoice by invoice, milestone by milestone.
Yet almost all of them only think about financing once.
How R&D Spending Actually Accumulates
If you’re running an R&D-active company, the spending pattern will feel familiar. But it’s worth walking through, because the funding mechanics map directly onto it.
July kicks off the new financial year. Projects start up or roll into their next phase. Developers are on payroll, contractors are engaged, and materials are ordered. By late September, three months of eligible expenditure have landed in the books.
October through December tends to ramp. Prototype builds start consuming real budget. Clinical trials advance into the next phase. The backend developer you finally hired in August is now a full quarterly salary line item. Your year-to-date eligible spend has roughly doubled.
Then, January to June compounds the pattern. New hires are fully embedded. Testing and iteration cycles demand fresh consumables, upgraded infrastructure, and expanded cloud capacity. Each month adds another layer to the eligible expenditure pool.
The Australian Bureau of Statistics puts total business R&D expenditure at $24.41 billion for 2023-24, an 18% increase from $20.64 billion just two years earlier. The top fields of research, information and computing sciences alone account for 42% of total business R&D, and are precisely the sectors where spending is most continuous. Developer salaries land every fortnight, SaaS infrastructure bills are monthly, and none of it waits for the government to catch up.
And because R&D finance is pegged to the running total of that current, the funding opportunity keeps pace with the spend. The question every R&D-active business should be asking mid-year: has my eligible expenditure grown since my last drawdown? If the answer is yes, repeat R&D loans are worth exploring.
The Financial Year Funding Cycle, Step by Step
Understanding how repeat drawdowns work means understanding the five phases that play out across a standard Australian financial year (1 July to 30 June). None of this changes the government’s R&DTI process. What it changes is when you get access to capital.
Phase 1: Expenditure begins
From 1 July, your business starts incurring eligible R&D costs: salaries, contractor fees, raw materials, and a proportion of overheads directly tied to experimental work. Your R&D tax consultant tracks which activities qualify and maintains contemporaneous documentation linking costs to eligible activities as required by AusIndustry.
Phase 2: First drawdown
After the first quarter, you’ve accumulated enough eligible spend to model the expected rebate. For companies with aggregated turnover under $20 million, the refundable R&DTI offset sits at 43.5%, the 25% corporate tax rate plus an 18.5% premium. If the company is in a tax loss position, which is common among early-stage tech and biotech firms, the entire offset is paid out as a cash refund by the ATO. The lender reviews the accrued year-to-date expenditure, verifies it against a comfort letter from your R&D advisor, and advances up to 80% of the modelled rebate value. That first drawdown can land within two weeks of approval.
Phase 3: Capital reinvestment
That advanced capital goes straight back to work. Hiring for the next sprint. Procuring materials for prototype iteration. Engaging external testers. The critical thing: R&D activity doesn’t pause between drawdowns. Every dollar spent on further eligible work grows the total expenditure pool and generates a fresh increment of rebate entitlement.
Phase 4: Subsequent drawdowns
As Q2 and Q3 pass, new eligible spend lifts the year-to-date total beyond the figure your first drawdown was calculated on. Your R&D advisor provides an updated comfort letter covering the incremental spend, and the lender advances additional funds against the expanded borrowing base. The process repeats. Third and fourth drawdowns follow the same structure, each one layering on the new capacity that’s built up since the previous one.
Phase 5: The R&DTI claim is lodged
After 30 June, the formal government process runs its usual course. Activities are registered with AusIndustry within the 10-month window (by the 30th of April for standard June 30th year-end companies). The R&DTI schedule is lodged with your company tax return. When the ATO processes the return and remits the refund, those funds settle the accumulated loan balance across all drawdowns in a single transaction. Any surplus flows back to your business.
The government’s timeline hasn’t changed. Your access to working capital has.
What Repeat R&D Loans Look Like in Dollar Terms
Abstract concepts are useful, but a simple example makes this clearer. Let’s run a scenario that makes the maths tangible.
A SaaS startup has $1 million in liquid capital earmarked for engineering development in FY2025-26. The company is in a tax loss position and qualifies for the full 43.5% refundable R&DTI offset.
Without repeat drawdowns:
The company spends $250,000 per quarter from its own reserves. By the 30th of June, it has invested $1 million and has a $435,000 rebate claim sitting in the government pipeline. That refund won’t arrive until some time in 2027, well over twelve months from when the first dollar was spent. In the meantime, the company has fully depleted its development budget and has to find other sources of capital or slow down.
Total R&D output: $1,000,000.
With quarterly repeat drawdowns:
After Q1, the company has spent $250,000. The accrued rebate value is $108,750 (that’s $250,000 × 43.5%). An R&D lender advances 80% of that: $87,000 in fresh working capital.
In Q2, the company spends its base $250,000 plus reinvests the $87,000 drawdown into further eligible R&D. Total Q2 spend: $337,000. New accrued rebate on that spend: $146,595. New advance: $117,276.
Q3 spend reaches $367,276. Q4 hits $377,812.
Total R&D output: approximately $1,332,000. That’s a 33% increase in gross development expenditure from the same starting capital, funded by unlocking money that was already earned but locked inside the government’s processing timeline.
The final rebate grows too, from $435,000 to roughly $579,000. That enlarged rebate comfortably covers the accumulated loan principal and interest, with surplus capital returning to the business.
This isn’t just theoretical. Because each drawdown is based on newly incurred R&D spend, reinvesting those funds can increase your total eligible expenditure over the year. Each reinvested dollar generates new eligible spend, which produces a fresh rebate increment, which can be partially borrowed against again. In practice, this can significantly increase the total R&D your business is able to fund within a single financial year. Not every dollar from a drawdown will land on an eligible activity. But even capturing part of that multiplier effect meaningfully shifts how much a company can get done between July and June.
For context on why that matters: CSIRO research shows every dollar invested in Australian R&D generates an average of $3.50 in broader economic benefit. The Business Council of Australia puts the figure even higher for targeted government-supported R&D, estimating a $5 return for every $1 of public investment. The opportunity is clear. The challenge for many businesses is accessing that capital early enough to act on it.
The 12 to 18 Month Wait That Makes All of This Urgent
Every conversation about repeat R&D loans eventually comes back to the same structural issue: the gap between when businesses spend on R&D and when the government reimburses them for it.
It’s a long gap. Longer than most first-time claimants expect.
Here’s the timeline in full. A company starts incurring R&D costs on 1 July 2025. The financial year closes on the 30th of June 2026. The AusIndustry registration deadline sits on the 30th of April 2027, a full 10 months after the year ends. Tax returns are lodged shortly after, typically by mid-May 2027 for tax agent-lodged returns. The ATO then takes additional time to process and release the refund, with R&DTI claims sometimes retained for verification. Total elapsed time from first dollar spent to refund received: routinely 12 to 18 months. For expenditure incurred early in the financial year, the wait can stretch beyond two years.
This isn’t news to the people running the program.
The Government Knows It’s a Problem
The Strategic Examination of R&D (SERD) final report, delivered in March 2026 by an independent panel chaired by Robyn Denholm, directly acknowledged the problem. Among its 20 recommendations was a proposal to enable quarterly R&DTI advance payments for startups, essentially formalising what repeat R&D loans already provide through the private market. The SERD panel also recommended lifting the refundable offset turnover threshold from $20 million to $50 million, which would bring substantially more companies into the cash-refund tier. Neither recommendation has been legislated yet, but the direction of travel is clear: the government recognises that annual reimbursement cycles create real financial strain for innovating businesses.
The Cash Flow Data Backs It Up
Meanwhile, the cash flow data tells its own story. Research from UNSW and CommBank found that close to 80% of Australian SMBs experienced cash flow impacts during 2024, with declining revenue and low cash reserves the most commonly cited factors. And the Australian Treasury itself describes the period between early R&D investment and commercial revenue as a “valley of death“, the phase where promising ventures fail not because the science was wrong, but because the money ran out before the rebate came in.
Australia’s business R&D intensity sits at just 0.9% of GDP, roughly half the OECD average, and has been stagnant since 2017-18, despite dollar values climbing. When the Business Council of Australia reports that large business R&D investment has declined by 24% over the past decade, the cash flow timing problem becomes part of a much bigger picture. Businesses that can’t fund continuous development will eventually stop trying.
Repeat R&D loans don’t fix the government’s processing schedule. But they make it possible to keep building while the clock runs.
Why Second and Third Drawdowns Move Faster
What the First Drawdown Involves
The first R&D loan always takes the most time. That’s the nature of any new lending relationship. The lender needs to get across the business: the nature of the R&D activity, the corporate tax position, the history of R&DTI claims, and the BAS position to check for any outstanding ATO liabilities that could affect the rebate. Your R&D advisor drafts the initial comfort letter. AusIndustry registration documents, the previous financial year’s tax return, and supporting financials are all compiled and reviewed.
It takes a few weeks. Sometimes longer for complex R&D programs.
What Changes for Returning Clients
But once that foundation exists, everything about subsequent drawdowns becomes faster and simpler. The lender’s credit team has already approved the overarching project scope. Your R&D advisor is already embedded; they know your accounting software, your timesheet methodology, and your technical personnel. Updating the comfort letter for Q2 or Q3 doesn’t mean re-litigating the scientific basis of the R&D program from scratch. It means auditing the incremental spend since the last review and confirming it meets the same eligibility criteria.
The result? Repeat drawdowns for existing clients can move from application to funded in a matter of days rather than weeks.
Multi-Year R&D Programs and Repeat Financing
For startups and growing businesses running multi-year R&D programs, this efficiency compounds over time. The R&D Tax Incentive itself supports continuity: companies with recurring R&D projects can claim the incentive every year, provided they keep testing new aspects or iterations. R&D projects commonly span three to four years from initiation to commercialisation, meaning the same business can cycle through repeat drawdowns not just within a single financial year, but across several in succession.
And for businesses confident their R&D spend will recur, there’s an option to lock in that relationship at a lower cost, which brings us to how R&D finance works at a structural level.
How R&D Finance Keeps Development on Track
Who We Are
Rocking Horse Group is a specialist R&D finance lender based in Sydney, working with innovative businesses across Australia. We have one product: R&D finance. That’s all we do, and we’ve built our entire operation around doing it well.
We’re not an R&D tax advisor, we don’t lodge R&DTI claims, and we don’t assess whether your activities are eligible for the incentive; that’s between you and your R&D tax consultant. Our role is purely financial: we lend against eligible R&D spend that’s already been incurred and confirmed by your advisor. We work alongside your R&D tax consultant, not in place of one. If you don’t yet have an advisor, we can connect you with a trusted one from our network to get the process started.
The founders bring deep experience in equities and funds management, and the business was built to fill a specific gap in the Australian innovation ecosystem, the timing mismatch between when companies spend on R&D and when the government reimburses them. That gap can stretch beyond 18 months. We exist to bridge it.
How R&D Finance Works
We provide funding from $50K to $5M, calculated at up to 80% of your accrued year-to-date eligible R&D expenditure. The key word here is “accrued.” We don’t lend against projections or forecasts of what you plan to spend. The expenditure must have already been incurred.
The loan settles when your ATO rebate arrives. There are no monthly repayments in the interim; interest accrues over the life of the loan and is paid at settlement alongside the principal. There are no restrictions on how you use the funds. Some businesses reinvest directly into R&D. Others use the capital for hiring, marketing, operations, or keeping the lights on while the rebate makes its way through the government system.
There are no personal guarantees and no equity dilution. The loan is secured against the expected R&DTI refund, not against your house or a slice of your company.
To access funding, you’ll need three core documents: your AusIndustry registration letter, the previous financial year’s tax return, and a comfort letter from an approved R&D tax consultant confirming your eligible expenditure. From there, the process moves through eligibility review, BAS verification, and a guided application. Funding typically arrives within two weeks of approval, and the option to take it as a lump sum or quarterly drawdowns means the structure can flex around your spend cycle.
What Sets Us Apart
There are no personal guarantees, no equity requirements, no monthly repayments, and no restrictions on how funds are used. Those are the headline differentiators, and they matter because most other forms of capital available to early-stage R&D businesses come with significant strings attached.
We’re also a specialist lender, not a generalist. We understand the R&D Tax Incentive program, the timing of government processing, the role of the comfort letter, and the way eligible expenditure accrues throughout the year. That focus means faster decisions and fewer surprises.
For businesses with recurring R&D programs spanning multiple financial years, we offer a three-year Multi-Facility Agreement that locks in pricing certainty over a longer horizon. The rate is always 1% less than the standard single-year rate, with lower exit fees too. The application fee remains at $500. If you sign up for three years but don’t end up needing R&D finance in Years 2 or 3, you still benefit from the reduced Year 1 rate. There’s no penalty for not drawing down; it’s a facility agreement, not a commitment to borrow.
This option is worth considering for any business whose R&D program extends beyond a single financial year. If you already know you’ll be spending on eligible activities next year and the year after, locking in a lower rate now reduces your cost of capital across the entire project lifecycle.
How the Cost Compares to Equity
Every form of capital has a price. The question is what that price looks like over time.
R&D finance costs interest that’s repaid when the ATO rebate arrives. The standard rate is 1.42% per month (17% p.a.), or lower on a three-year agreement. Once the loan settles, the cost is behind you.
Equity is different. A venture capital or angel round means giving up a permanent share of ownership in exchange for capital today. That dilution doesn’t reverse when revenue starts flowing. Board seats, reporting obligations, and loss of founder control often come with it. And for a business with a clear R&DTI entitlement, where the government has effectively agreed to reimburse a portion of your R&D spend, giving up equity to fund the wait seems like an expensive trade.
To put a rough number on it: a company that raises $500,000 from a VC at a $5 million valuation gives up 10% of the business. Permanently. The same company accessing $500,000 through R&D finance pays interest over a few months and retains 100% ownership. If the company later raises equity at a higher valuation, because it used the R&D finance to hit commercial milestones that proved traction, the founders negotiate from a position of strength rather than desperation.
You can estimate how much you could access through our online calculator, or explore how R&D financing works for startups at different stages of growth.
FAQs About Repeat R&D Loans
Can I access R&D finance more than once in the same financial year?
Yes. As your eligible R&D expenditure accumulates throughout the year, so does the amount you can borrow against. Each drawdown is assessed against your updated year-to-date spend, confirmed by a fresh comfort letter from your R&D tax consultant. Funding can be accessed as a lump sum or through quarterly drawdowns aligned to your development cycle.
Do I need to complete my R&DTI claim before accessing a repeat loan?
No. The formal R&DTI claim is lodged after the financial year ends, through the standard AusIndustry registration and ATO tax return process. R&D finance is available during the financial year, based on the expenditure you’ve already incurred. You’ll need to complete the R&DTI process eventually, but you don’t need to wait for it before accessing finance.
What is a comfort letter, and why is it required for each drawdown?
A comfort letter is an independent confirmation from your R&D tax consultant that your business has incurred a specific dollar amount of eligible R&D expenditure. It validates the quantum of spend, the estimated rebate, and confirms the activities meet the legislative definitions of core and supporting R&D activities. The lender requires an updated one for each drawdown to make sure the borrowing base is accurate, compliant, and reflects only the spending that has actually occurred.
What happens to my repeat loans when the ATO refund arrives?
When the ATO processes your company tax return and disburses the R&DTI refund, the funds are directed to settle the accumulated principal and interest across all drawdowns in a single transaction. Any surplus after settlement flows back to your business. The private financing arrangement doesn’t alter or bypass the government’s compliance process, the ATO claim runs exactly as it would without the loan.
Is repeat R&D financing only for large companies?
The answer is not at all. In fact, close to half of all R&DTI claimants are small businesses with turnover under $10 million, and more than half of claimant companies are less than 10 years old. Repeat R&D loans are especially relevant for startups and growth-stage companies where a few weeks of cash flow timing can determine whether a critical hire gets made, a prototype reaches the next milestone, or a competitor beats you to market.
The gap between R&D spending and government reimbursement is a structural feature of the R&DTI program. It isn’t going away any time soon, though the SERD panel’s recommendations suggest the government is at least thinking about it. In the meantime, for businesses with ongoing development costs and growing eligible expenditure, repeat R&D loans turn a 12-to-18-month wait into something you can manage quarter by quarter.
If your eligible spend has grown since your last drawdown, there may be additional funding available to you right now.
Check your R&D financing eligibility or talk to us about R&D financing to find out.