If you’re planning a technology upgrade, you may wonder: should you apply for a technology loan or look for a grant? In Canada, grants are competitive and limited, while technology loans are more predictable and often faster. Picking the right option can affect your cash flow, timeline, and long-term growth.
This guide explains the real differences so you can choose what works best for your business now.
Both options can help you buy technology equipment, software, or digital upgrades. The main differences are in repayment, timing, and certainty.
Technology grants are non-repayable contributions. They are attractive because you don’t have to pay them back, but they have rules.
Key features of technology grants:
Most technology grants support innovation, research and development, clean technology, or certain industries. Few grants cover basic IT upgrades like laptops or servers unless they are part of a bigger innovation project.
Technology loans are repayable financing for buying or upgrading technology.
Key features of technology loans:
A common example is the BDC Technology Equipment Loan, which supports Canadian businesses investing in technology equipment, software, and IT infrastructure.
The Technology Equipment Loan from the Business Development Bank of Canada (BDC) is available across Canada.
What you can use this loan for:
Key points to know:
Because this loan is made for technology investments, businesses often use it when a grant is unavailable or too slow.
GrantHub’s eligibility matcher can help you quickly see which programs fit your province and industry, so you know if a grant or loan is best for your needs.
Consider these four questions to help you choose.
If the upgrade is urgent—like fixing cybersecurity issues, system failures, or scaling up—a loan is usually the better choice. Grants rarely move quickly.
Most grants pay after you spend your own money. If you can’t cover the purchase upfront, a technology loan may be safer.
Grants require progress reports, financial tracking, and sometimes audits. Loans focus more on repayment and your business’s financial health.
Many businesses delay upgrades hoping for a grant that isn’t guaranteed. This can slow growth or increase risk.
Programs like the BDC Technology Equipment Loan are sometimes mistaken for grants. Always confirm if funding is repayable.
Some grants don’t allow you to combine funding sources. Always check stacking rules before accepting a loan.
Loan interest may be tax-deductible as a business expense, but grant income can sometimes be taxable. Check with your accountant.
Q: Is a technology loan better than a grant?
It depends on your timing and certainty. Loans are faster and more predictable, while grants are cheaper but harder to get.
Q: Is the BDC Technology Equipment Loan a grant?
No. It is a repayable loan from the Business Development Bank of Canada.
Q: Can startups apply for technology loans in Canada?
Yes, including through BDC, but approval depends on revenue, traction, and risk profile.
Q: Can I combine a technology loan with a grant?
Sometimes. Many grants allow stacking, but each program has its own limits. Always review funding rules before accepting financing.
Q: What technology expenses are usually eligible?
Loans often cover hardware, software, and IT infrastructure. Grants usually focus on innovation-related costs, not basic equipment.
GrantHub tracks hundreds of active grant programs across Canada—see which ones match your business profile.
Choosing between a technology loan and a grant in Canada comes down to speed, certainty, and how critical the upgrade is for your business. Many companies use loans to move forward now and apply for grants later if they become eligible.
To explore your options further, check out:
GrantHub helps you compare funding options so you can focus on the right application for your business.
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