Plain-language explainer
The three words that get mixed up most often. and what each one means for the money you must still arrange.
A grant is money that does not have to be repaid. Genuine grants are comparatively rare and are usually limited, targeted, or tied to a specific purpose such as training, a group activity, or a component of a project. Never assume a scheme is a grant simply because someone describes it as “government money.”
A loan must be repaid with interest. Government-linked loans can make a project easier to finance through a bank, a concessional rate, an interest subsidy, or a credit guarantee. They are still debt. The first question is whether the business can comfortably make the monthly repayment after salaries, rent, stock, and household needs.
A subsidy pays part of a qualifying cost. A capital subsidy reduces the cost of an eligible asset such as machinery; interest subvention reduces the cost of borrowing. Many subsidies are back-ended: the applicant must arrange the approved purchase, keep bills, pass inspection, and wait for the benefit to be adjusted or released. Do not buy before confirming the scheme’s timing rules.