Difference Between Grants and Loans
By Claire Miles - April 1, 2022

It’s critical to know what financing choices are available to you if you’re an individual looking to grow your operations or a corporation. Loans and grants are two common -ways to get the money you need to complete your company projects. Therefore, it’s critical to know the difference between a grant and a loan before applying. So, what exactly is the distinction between a grant and a loan? Of course, each option has its own advantages and disadvantages, but before we get into the grants vs. loans discussion, let’s define grants and loans.

Table Summary

Grants are not repayable.Loans are repayable after a period, with added interest.
Grants are usually offered by the government. Although corporate organizations may offer gifts, they’re rare.Anyone can offer a loan.
Grants take a lot of time and process.It’s easier to acquire a loan


A grant is a monetary reward that can be given by the government, a school, or a non-governmental organization (NGO) to an individual, business, or institution to assist in completing a project that will benefit the public or them. This money does not need to be returned after a set period.

A loan is money you borrow from a person or a financial institution and must repay after a set period, plus interest. When you get a loan, you can use the money for whatever you choose, and there will be no consequences unless you fail to repay the loan.

Grant VS Loan

The most significant distinction between a grant and a loan is repayment. The difference between a loan and a grant is that a loan compels you to repay the money you borrow, whereas a grant does not. Grants are, in essence, gifts and non-repayable. Individuals, businesses, educational institutions, and non-profits may get grants from government departments, trusts, or corporations. Banks typically provide loans to both persons and businesses. However, private lenders or individuals (relatives and friends) may also offer loans.