Have you ever wondered what it would take for your business to grow with R&D financing? If you have, then look no further. As we celebrate five years of R&D lending this month, we’re sharing a few Radium Alumni stories and showcasing businesses that have achieved their goals with a little help from their Radium Advances. So let’s take a look at four Radium Capital clients and the various ways they’ve used R&D financing to achieve impressive results.
R&D financing emerged shortly after the arrival of the R&D Tax Incentive (R&DTI) in 2011. But back then, only a minority of businesses used R&D finance. Those that did, deployed it as an annual one-off burst of capital to bridge their cash flow until their R&D refunds arrived. Then in 2017, Radium Capital’s fintech platform, tailor-made for R&D lending, changed all that. Today, Radium Advances have made R&D finance a mass-market, mainstream funding option for businesses doing R&D. Eligible companies can still use a Radium Advance as a cash injection, but Radium’s platform offers complete flexibility and an array of methods to employ this form of financing. Innovators can access their R&D refund — big or small — whenever they want, using Radium Advances. From the R&D reinvestment model to increase their R&D expenditure, the R&D budgeting model to reduce their capital outlay, or the R&D budget-stretcher model to extend their R&D budget over 12 months, there is a myriad of ways to utilise Radium Advances.
R&D holds the key
When it comes to Radium Advances, qualifying for a loan is simple. If your company and R&D activity is eligible for the R&DTI refund, then your business is eligible to apply for a Radium Advance. You can be operating in any industry sector, anywhere in Australia. And there are no limits on the amount you can borrow or how often you access your R&D tax refund early with a Radium Advance.
Recce Pharmaceuticals, NSW
ASX-listed Recce Pharmaceuticals used the reinvestment model of Radium Advances to increase its annual R&D by 33%. Back in 2018, the Sydney-based biotech had successfully created and patented a new generation of anti-infective medicines to combat the threat of superbugs. Despite its success, Recce was facing a dilemma. The business either had to accept substantial risks from issuing more shares and becoming more diluted or urgently find affordable finance to progress into clinical trials. That’s when Recce’s team decided to explore the option of retrieving their R&D refund early by accessing and then reinvesting several Radium Advances into more R&D during the 2019 financial year.
Reinvesting in R&D made the biotech business eligible for a bigger R&D tax refund and enabled it to increase its R&D investment in a cost-neutral way. Recce Pharmaceuticals Chief Executive Officer James Graham says, “We needed a capital injection that wasn’t risky or dilutionary and the whole process – from start to finish was surprisingly quick and easy,” With the clock ticking on its patents, time and speed to market was everything for Recce. So receiving approval and funding for each Radium Advance in a few business days was a major upside for the medical pioneer. Since those days, this Radium Capital alumnus has gone from strength to strength. The company’s anti-infective compounds have produced promising results on several Phase I human studies on treatment-resistant bacteria. Investigations are also ongoing into the suitability of the company’s RECCE® 327 compound as a treatment for COVID-19. Read the full case study to learn more about how Recce Pharmaceuticals scaled up by increasing its R&D expenditure and accelerating its innovation using Radium Advances.
Classic Minerals, WA
Classic Minerals has almost 600 km² of tenements in West Australia where it has identified high-grade gold and base metal targets. The Perth-based explorer is currently fast-tracking its flagship project, Kat Gap, and is on track to become a gold producer. And the company is using the budgeting model of Radium Advances as part of its transformation process. Classic Minerals Company Secretary Madhukar Bhalla says, “Capital raising is the main funding option open to mining explorers but it’s dilutionary, so accessing our expected R&DTI refund regularly with Radium Advances, is a great way to avoid extra equity or debt finance.” Classic Minerals heard about Radium Capital through its accountant. “We met with other R&D loan providers, but ultimately, we went with Radium Capital because the Radium team was so upfront and transparent from the outset. We knew we could count on them,” Madhu says.
Classic Minerals has accessed multiple Radium Advances ranging from $231,000 to almost $1 million in size. The business has tended to reinvest 80% of their Radium Advances back into R&D, and utilised the remainder for other business costs allowing it to reduce capital raising and smooth cash flow. “Over the years, we’ve got to know the whole team at Radium. They’re a great bunch of people, and we love the service they provide for us,” Madhukar says. Radium’s smooth, simple and fast processes that provide ready access to capital have particularly impressed Classic Minerals. “For our most recent Radium Advance, applying for the loan, getting approval then receiving the funds all happened in just a few business days,” Madhukar says.
Some businesses need a burst of capital rather than regular Radium Advances deployed in a specific way at strategic intervals. And NeedleCalm is a case in point. The Melbourne-based MedTech, had developed a Class 1 medical device that’s also called NeedleCalm. The technology offers a solution for needle phobia and treatment avoidance for patients with a fear of needles. In December 2019, NeedleCalm was about to launch its innovative device when its capital raise to support the launch fell through. The COVID-19 pandemic hit, and cash flow became an issue. The launch and entire future of NeedleCalm was thrown into doubt. Fortunately NeedleCalm heard about Radium Capital and decided to explore their R&D financing options. NeedleCalm was nearing the end of its R&D program, but it could still use Radium Advances to gain early access to the future R&D tax refund it had accrued and stabilise its cash position. “When you use R&D finance, investors look at it favourably and realise that you’re being quite smart with your money and not just giving away equity,” NeedleCalm Founder and Managing Director Lauren Barber says. With the extra runway it needed in place, NeedleCalm was able to launch the NeedleCalm device in February 2021. Within months of launching, NeedleCalm was lauded for its innovation, with the MedTech start-up winning a 2021 Good Design Award and being recognised by Consumer Healthcare Production Australia at the 2021 CHP Australia Diamond Awards. Today, the company has a bright future with three new products in the pipeline.
Perth-based construction robotics innovator, FBR, is another Radium client that used Radium Advances as a much-needed cash injection at a critical time. FBR had created a dynamic bricklaying robot named Hadrian X®. Despite its achievement, FBR was in a bind. It needed to maximise the success of its next capital raise to keep its growth on track and avoid becoming too diluted. If FBR could increase the bricklaying speed of Hadrian X® and complete several software and hardware improvements, the more successful the funding round would be. But it lacked the retained earnings required for this R&D. Then the business heard about Radium Advances. FBR Chief Financial Officer Aidan Flynn says, “A Radium Advance was a quick and easy way to get cash in the door. Radium Capital’s online portal makes the process of getting an R&D advance fast, easy and efficient. And it’s competitively priced.” Accessing a precision-timed Radium Advance gave FBR easy access to bridging capital before its tax refund arrived. The innovator could complete the R&D it needed to make the most of its next capital raise. FBR went on to win the Small to Medium Enterprise: Leadership & Culture Award in 2021 and a 2021 SafeWay Award for Work Health & Safety Leadership among other accolades. The robotics innovators has signed a walls and slabs contract for 16 new build homes in Western Australia and is also currently working towards taking its technology to overseas locations, including United Arab Emirates and Mexico. Read the full case study about how Radium Advances helped FBR on its scale-up journey.
Flexible finance every time
Whether it’s your first or next Radium Advance; a one-off burst of capital or regular financing, Radium Capital has the funding to suit your business. You can access Radium Advances whenever you need them because we offer businesses with R&D that are eligible for the R&DTI refund a completely flexible and scalable financing solution. There are no limits on your loan amounts or their frequency. Since Radium Advances are your own money — your R&D refund that you’re accessing early — there are no constraints on how you spend the capital. Reinvest in more R&D or use it for general cash flow. The choice is yours. To find out more about how you can use Radium Advances, check out our blog on the different funding models for R&D financing. If you’re ready to explore your eligibility for Radium’s non-dilutionary advances, contact our friendly R&D finance experts today.