Grants, loans, tax credits and wage subsidies: what’s the difference?
Plain definitions of the main kinds of public funding, what each costs you, and how to tell them apart in a program listing.
"Funding" covers very different kinds of money. Mixing them up leads to bad plans, so it pays to know which one you are looking at.
Grants and contributions
A grant is money you do not repay, given for a defined purpose. It usually comes with conditions: what you can spend it on, reports you must file and sometimes a requirement to match it. In Canada, many federal business programs are "contributions", which can be non-repayable or repayable depending on the agreement. Read the terms.
Loans and loan guarantees
A loan must be repaid, usually with interest, though public loans can have better terms than a bank. With a loan guarantee, a bank or lender makes the loan and the government guarantees part of it. Either way, it is debt. On GrantSift every loan is labelled "must be repaid".
Tax credits
A tax credit reduces tax you owe, and refundable credits can pay out even when you owe nothing. You claim them with a tax return for spending you have already made, such as research work under Canada's SR&ED program. There is usually no intake or competition, but there are strict rules and deadlines.
Wage subsidies
A wage subsidy covers part of the pay for a new hire, often a student or young person. It is paid to the employer. Students should know these exist, because mentioning one can make an employer more willing to hire you.
Support programs
Some programs give advice, mentoring or training instead of money, or alongside it. They are often underrated.
How to tell them apart
- Look for "repayable", "interest" or "loan" in the terms.
- Check who receives the money: you, your employer or a lender.
- Check when you get it: before the work (advance), after (reimbursement) or at tax time.
Browse by funder type or run the eligibility check.