The difference between a government-backed loan and Canada government grants.

By: Alice Brooks

For those who do not know the difference between loans and grants, here are some basics for you to go by. When you talk about Canada government grants or any other grants that any government in the world gives out to their citizens, you are essentially talking about what they call "free money." It is called free money due to the fact that you get the money you need for certain things like education or business funding without having to worry about paying it back. Loans are funds that you borrow and pay back little by little over a certain amount of time.

This is the reason why more people opt to try for Canada government grants than they do for loans, even when the loans have low interest rates and backed by the government. Grants offer a person the freedom to do what they will with the money provided to them by the government without the looming payments that usually pressure people who have borrowed money to produce something lucrative. Although grants do not necessarily mean a free ride, it's far from it actually, they do give a person more room to improve on their ideas without the pressure of having to come up with revenues soon to pay for the loan they took out.

When you get approved for one of the many Canada government grants that you applied for, you essentially get funds to start doing what you said you are planning on doing in the grant proposal you passed to the grant giving body. Of course, the work does not end there. Once you get your grant, proving your theory and your business savvy begins. You will need to keep your receipts and your bookkeeping up to date and concise so as to avoid having the committee raise questions about their money. This is also to avoid the cessation of the flow of funds to help realize your idea.

When you get loans instead of grants, you don't necessarily need to keep records for the government to check on or for the bank to see where you spent your money on. As long as you make your payments on time and you are doing what you need to do to make your business venture succeed, you have free reign over your finances or over the loan you took out. You simply need to make more than enough to live off the business you started with your loan and to be able to make payments every month on such a loan.

Depending on which kind of funding you feel will fit your needs and which one you are best qualified for, whether it is one of the many Canada government grants or the many low interest loans that the government helps people obtain, you will still need to put together a convincing and compelling business plan and proposal for these authorities to even give you a shot at these funds. Do your research well, put together a well-thought and well-planned business portfolio and submit these to the authorities that give out these funding options and you will soon find yourself in business.

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Decide whether Canada government grants or loans backed by the government are best for your needs.

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