If you are considering repayable contributions or government-backed business loans, you may be wondering what expenses these funds can cover. These programs offer more flexibility than grants, but they still have clear rules. Understanding which expenses are eligible — and which are not — helps you avoid problems like clawbacks, delays, or rejected applications.
Repayable contributions and government-backed loans in Canada are meant to help your business grow. They are not for personal use or paying off past debts. Each program has its own rules, but there are common patterns across the country.
Many government-backed loans let you buy assets that help your business operate or grow. Typical eligible costs include:
For example, the BDC Commercial Real Estate Loan covers up to 100% of eligible project costs for land, buildings, and construction, with repayment terms of up to 25 years.
Buying or improving business property is a common use of these loans. Eligible expenses often include:
With BDC’s commercial real estate financing, you may be able to defer principal payments for up to 36 months, which can help your cash flow during construction or renovations.
Working capital is usually eligible if it supports expansion. Approved uses often include:
The BDC Capital – Growth & Transition Capital (Working Capital) program offers $250,000 to $35 million in repayable financing for R&D, product development, and market expansion.
GrantHub’s eligibility matcher can help you find programs based on your province, industry, and planned expenses.
Some repayable contributions support getting your product ready for the market. For example, the WeMB — WeTech Loans program offers up to $25,000 as an interest-free repayable contribution for women-owned, tech-enabled businesses with a market-ready prototype.
Eligible expenses may include:
Funds must be spent and repaid according to your agreement. Projects should be ready to start generating sales.
Certain programs help you grow by buying another business. The WeMB — Loans program provides $5,000 to $150,000 in repayable financing for starting up, expanding, or purchasing an existing business in Manitoba.
Eligible costs can include:
Loan guarantees are common in agriculture. The Canadian Agricultural Loans Act (CALA) Program guarantees 95% of a lender’s net loss on eligible loans to farmers and agricultural co-operatives.
Eligible expenses include:
Not all business costs are covered by these programs. Most repayable contributions and government-backed loans do not cover:
Programs check if the expense directly supports your business and future revenue.
Thinking loans work like grants
Loans must be repaid. Spending outside the approved scope can mean you have to pay back the funds right away.
Including expenses from before approval
Most programs only cover costs you incur after your agreement starts.
Using working capital for survival
Loans are not meant to cover losses or fill gaps without a growth plan.
Mixing personal and business spending
Poor expense tracking can lead to audits and repayment demands.
Q: Are repayable contributions considered taxable income?
No. Because you must repay them, these funds are not taxable income.
Q: Can I use a government-backed loan to pay myself a salary?
Usually not, unless the salary is clearly tied to an approved growth project.
Q: Do I need receipts for loan-funded expenses?
Yes. You must keep detailed records to show how you spent the money.
Q: Can I combine loans with grants?
Often yes, but there are stacking rules. Programs may limit total government support.
Q: Are interest-free loans still repayable contributions?
Yes. Programs like WeMB — WeTech Loans are interest-free but must still be repaid.
GrantHub tracks hundreds of active repayable contribution and government-backed loan programs across Canada. You can check which ones fit your business and expenses.
Before you apply, make a list of your planned expenses and check them against program rules. This helps you avoid surprises and speeds up approval. If you want to learn more, see:
When you are ready, GrantHub helps you compare programs so you can apply with confidence.
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