A Guide to Apply for SMEs Loan in Malaysia to Achieve Your Business Dream

What is SMEs?

SMEs stands for small & medium-sized enterprises, which decide on the number of employees and their incomes. To be considered small and medium-sized enterprises, these two determinants must be subject to a country-specific standard. Different countries have different standards to qualify for this identification.

Small and medium-sized enterprises are small in terms of definition; however, they are bigger than these big companies. Although the funds of large companies are lacking, its essence is a job and is therefore very important for the innovation and growth of the country’s economy.

Small businesses can be compared to those of the Main Street and medium-sized businesses to lower-than-average markets. With respect to mergers and acquisitions, small and medium-sized businesses tend to attract valuated multiples because they have a smaller market share and shareholder.

 

SME Corporation Malaysia

SME Corporation Malaysia is the central coordinating body within the Department of International Trade and Industry. Malaysia develops policies and strategies for SMEs and coordinates the implementation of small and medium enterprise development programs in all relevant ministries.

Agencies serve as a central point of reference for research and information dissemination in small and medium-sized enterprises. They also provide consulting services to small and medium-sized enterprises in Malaysia.

SME Corp Malaysia also assumes the role of a secretariat within the National Council for the Development of Small and Medium Enterprises (NSDC), led by the Prime Minister of Malaysia.

SME Corp’s Vision: The leading organization for the development of progressive small and medium enterprises to enhance the wealth creation and social welfare of nations.

SME Corp’s Mission: Promote the development of competitive, innovative and resilient small and medium-sized enterprises through effective coordination and business support.

Source: SME Corp

 

Eligibility Criteria and Main Characteristics of SMEs Loans in Malaysia

1. Relevance: 

  • Small and medium enterprises established under the Companies Act 1965 or the Companies Registration Ordinance 1956. At least 60% of the property in Malaysia; Has a valid local license and small and medium-sized enterprises whose share of listed companies does not exceed 20% (only if applicable).

2. Sectors:

  • Production
  • Production services
  • Services (except for insurance and financial services)

3. Amount of funding:

  • Minimum: RM 50,000
  • Project Funding – RM5 million maximum. Long-Term Asset Financing – RM5 million maximum.
  • Working capital financing – RM3 million maximum. Hardware / Computer Software – RM500,000 maximum.

4. Elements eligible for funding:

  • Construction of industrial, commercial, factories or premises, assembly plants or commercial premises, factories, machinery or equipment, and computer or computer software. Costs incurred for the initial reconstruction of the trade and the updating of the turnover of the retail trade.

5. Percentage of funding:

  • Fixed assets or computer hardware or software: up to 90% of the cost of new assets. Up to 65% of the machinery or equipment used or restored is not more than 5 years old.
  • Working capital: – up to 100% for the purchase, revolving credit, up to 80% for the sale, revolving credit, up to 90% for the term financing.

6. Refunds:

  • Computer equipment or hardware or computer software – land and buildings: up to 25 years, including 2 years of installation and machinery up to 7 years, including up to 1 year of computer equipment or computer software – up to at age 4, including up to one year.
  • Working capital: – Purchase of revolving credits and revolving credit sales: up to 150 days after withdrawal, including reinvestment options for a period not exceeding 60 days to which they are eligible. Duration of funding: up to 3 years, including a maximum period of 6 months.

7. Interest rate / profit:

  • 4% annually

 

Small Business Loan in Malaysia

 

Economic Sectors that Finance the SMEs

Bank Negara Malaysia

As part of ongoing efforts to ensure that small and medium-sized enterprises (SMEs) in all economic sectors have access to affordable financing, Negara Malaysia Bank (BNM) has created a financing channel for small and medium-sized enterprises. Through financial institutions.

The objective of the Fund is to improve access to finance for small and medium-sized enterprises in the agricultural sector by supplementing the main sources of financing of financial institutions.

 

1. The agricultural projects financed by the Fund are:

  • Investments in fixed assets (for example, purchase of machinery and equipment or renovation of premises occupied by their owners); and or
  • Working capital; and
  • Development of agricultural projects. The cost of the land can be included in the calculation of the total cost of the project, provided that:
    • The amount does not exceed 30% of the total cost of the project; and
    • The land will only be used for primary food production activities

2. The agricultural projects financed by the Fund are:

  • Sustainable projects involving primary food production, integrated agriculture and food processing/distribution (end-to-end);
  • National orientation: at least half of the total production is sold on the national market.

3. Funding will not be used for the following activities:

  • Purchase of shares;
  • Refinancing of existing credit/financing facilities;
  • Purchase of land/investment property;
  • Real estate development;
  • Investment companies.
  • Activities in which shares in the money business
  • Gambling, alcohol, tobacco, or similar activities and products;
  • Non-shark trade activities
  • The cost of ancillary work

Source: CIMB Bank Berhad

There are also other online financing sector applications, such as:

 

BSN Microplus

Conventional loans to small and medium-sized enterprises in the form of working capital for small and medium-sized enterprises in the manufacturing, services, retail or wholesale sector, provide increased financing to RM 250,000 at a fixed interest rate, financing up to 7 years Durability Loan 30 days of approval

 

1. What loan does BSN Microplus offer?

BSN Microplus is a conventional commercial loan offered by Simpanan Nasional Bank to micro and small businesses. It’s an opportunity for these business owners to develop and grow their business, leading them to new heights.

 

2. What can I finance with this commercial loan?

With this commercial loan, you have several options for investing in capital. You can use it in manufacturing, service and retail or wholesale. Use it to grow your business, buy machinery or equipment, and manage daily costs.

 

3. Who can apply for BSN MicroPlus loan?

In order to qualify for this commercial loan, applicants must meet the definition of owners of micro, small and medium enterprises established by the National Council for the Development of Small and Medium Enterprises. They must have a satisfactory financial history with the BSN or any other financial institution

 

4. What is the MIDF soft loan program for small and medium-sized enterprises?

For new businesses and existing SMEs seeking financing for working capital requirements, long-term asset acquisition, and commercial facility restoration. Financing up to RM3million up to 7 years loan.

 

5. What can I do with a low-rate loan program for small and medium-sized businesses?

The MIDF Small Business Loan Program can help existing businesses find new funds available for working capital and the acquisition of long-term assets, such as the financing of premises, equipment, and software.

 

6. Who can apply for an SLSME business loan?

First, you must be an SME incorporated under the Companies Act of 1956 or the registration of business entities of the regulation with a valid local license. Your company must also have at least 60% of the shares in the hands of the Malays.

 

7. What is a Business Acceleration Program for SMEs?

Small and Medium Business Financing Program for entrepreneurs who want to satisfy their working capital needs and purchase capital assets. Financing up to RM1million up to 7 years of ownership Unsecured loan

The Business Accelerator program is financial assistance for SMEs, in cooperation with small and medium-sized enterprises, to support the growth of small and medium-sized enterprises. This commercial loan targets micro and small businesses in development to strengthen their large businesses.

Unsecured commercial loans for working capital with fast credit approval and low rates for small businesses.

Source: BSN Microplus

 

UOB BIZMoney

UOB BIZMoney is an opportunity for small business loans for small businesses or micro businesses that want to expand their reach and expand their business. This is a higher loan amount, without warranty claim and at a competitive interest rate.

The application process is simple and does not require a fee for processing a loan, but only some of the documentation requirements for writing. Because insurance is not necessary, you only need the collateral of a shareholder or director of your company. BIZMoney also works with a quick rating of only Advice business days.

The initial interest rate offered by UOB BIZMoney is 0.54% per month, bringing the annual interest rate to only 6.48% per annum. One of the lowest on the market.

UOB BIZMoney is available for the sole proprietor, limited partnership or private company registered in Malaysia, as well as for the control of citizens or residents of Malaysia for public relations, with the exception of Singapore.

Source: UOB BIZMoney

 

imSME

imSME is Malaysia’s first online referral platform for SME financing/ loan, which is wholly owned and managed by Credit Guarantee Corporation Malaysia Berhad (CGC).

The name imSME is an acronym that stands for “I am mSME”. The letter ‘mSME’ also represents micro, small and medium enterprises (commonly referred to as SMEs in Malaysia). SME refers to all sectors of businesses that have specific revenues or the number of employees. In essence, imSME embodies the characteristics of the SMEs that are dynamic, confident, self-reliant and enterprising.

Through imSME, we connect Malaysian SMEs like yourself with participating banks by matching your business needs and profile with the right SME business financing/ loan. By using imSME, you can find the best SME business financing/ loan options for your business, saving you the hassle of going to multiple banks to look for financing.

The ultimate aim of imSME is to assist Malaysian SMEs across various sectors in obtaining the financing/ loan that is required, at a faster rate and at their own convenience

We know that it can be very time to consume and tiring when searching for an SME business financing/ loan in Malaysia; especially, for entrepreneurs that are in need of a financing/ loan to start a business, expand the business or purchase of assets.

The objective of imSME is to assist SMEs in growing their businesses effortlessly, by providing them with a list of matching business financing/ loan that fit their business needs best.

Source: imSME

 

Conclusion

In short, small and medium-sized loans in Malaysia contribute to the average despite the most beneficial factors that would contribute the most. However, it should be noted that the influence of Malaysian small and medium-sized enterprises cannot be reduced to anything.

They still need to increase production levels to be more productive and efficient. With the immediate support of the government, small and medium-sized businesses can continue to improve the economy in all its consequences.

You can go for other local finance companies for your startup fund lending, but make sure that you have checked the Bank Negara Blacklisted Financial Companies List in advance.

They are still many ways that SMEs can acquire fund besides lending, which includes crowdfunding, peer-to-peer lending, or simply just get support from friends & family.

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