The mortgage banking industry is not typically recognized for its R&D initiatives, yet many companies in this sector engage in extensive research and development, especially in the realm of software development. Innovations in financial software can revolutionize loan origination, underwriting, and servicing, providing customers with lower rates and a better overall experience. Tax credits for R&D activities in this industry can significantly boost a company’s bottom line, but claiming these credits is often a challenging endeavor.
With over 20 years in the mortgage banking industry, this firm has established itself as a market leader offering cutting-edge loan products. The firm has branches and loan officers nationwide, and relies heavily on its proprietary financial software to originate, underwrite, close, and fund loans efficiently and economically.
Navigating the complexities of R&D tax credits presents unique challenges for this company. The ever-shifting landscape of the industry continually alters the functional requirements of their software platform. This complicates the task of pinpointing which aspects of the software development qualify as research and development. The firm also faced hurdles in managing an agile development framework, which, while efficient, required meticulous documentation to qualify for tax credits.
The company’s unique software platform required extensive research, development, and testing. Developed within an agile framework, the software had various aspects that qualified for R&D credits. This included everything from initial high-level architecture design to active development cycles, often referred to as “sprints.”
The company also engaged in rigorous validation processes, involving multiple departments to run newly developed modules through comprehensive testing phases. These activities were pivotal in refining the software and fell under the category of R&D as they led to technological advancements in the mortgage banking industry.
Source Advisors was introduced to this mortgage banking company through an industry contact. After conducting a preliminary assessment, we found that the firm had significant untapped potential for claiming R&D tax credits, particularly related to their software development activities.
Conducted an exhaustive evaluation of the firm's agile software development activities, identifying qualifying R&D tasks.
Estimated the financial implications of claiming R&D tax credits, showcasing the significant potential for cash flow improvement..
Assured that the company’s software development activities and associated documentation were in line with prevailing tax laws and regulations.
Source Advisors dives deep into a company’s structure and research activities to maximize both federal and state R&D tax credits.
Contact Source Advisors to turn your R&D investments into financial advantages.