Councillors welcomed the opportunity to join a regional scheme to kick-start economic growth and job creation.
The Leeds City Region Revolving Investment Fund will pool resources from local authorities to part fund commercial projects.
A minimum investment level has been set at £1 million and for every pound of public sector funding there must be at least £3 of private sector funding.
The scheme aims to partly plug the gaps in funding and £10 million has been made available in the first tranche of short term debt finance.
Calderdale Council agreed to commit its share of £1.632 million.
Council leader Tim Swift said the aim was to make it as easy as possible for developers to seek assistance.
Officers are still going through the finer details of the scheme to ensure the district benefits.
Councillor Swift said: “We won’t need to make the money available until there is a development for Calderdale.”
Councillor Stephen Baines (Con, Northowram/Shelf) said it was an excellent scheme in principal and having spoken to finance officers he had been reassured the council’s commitment was achievable.
“Our finance team will work to meet the requirements,” he said.
“That could be 12 months or two years before it is called upon by businesses in Calderdale wanting the shortfall necessary to get business plans going ahead.”
Councillor Barry Collins (Lab, Illingworth/Mixenden) said the scheme would help boost the future of Calderdale and it was right the council gets involved in it.