Fund Your SME With a Government Loan Malaysia

Fund Your SME With a Government Loan Malaysia

Over the past three years, the hot topic around the world has been the dreaded pandemic caused by COVID-19. The pandemic has hurt many businesses in Malaysia, especially Small and Medium Enterprises (SMEs). As Malaysia moves into the endemic phase, companies have a chance to rejuvenate their businesses once again. Syarikat Jaminan Pembiayaan Perniagaan (SJPP) is giving Malaysian business owners this opportunity.

SJPP is a company wholly owned by the Ministry of Finance to bridge the gap between SMEs and a Financial Institution (FI) by approving bank loans and providing government guarantee loans. SMEs are essential to our economy and need to be supported through this economic crisis.

SJPP’s currently offering government loans for SMEs in Malaysia, mainly PEMULIH Government Guarantee Scheme (PGGS). This is eligible for any majority Malaysian owned SME with an annual revenue of less than RM500 million. SJPP’s other schemes include:

  • PENJANA Tourism Financing Facility (PTF)
  • Working Capital Guarantee Scheme (WCGS) for Start-Up, Bumiputera, Export, and Women,
  • PENJANA SME Financing
  • Automation & Digital Guarantee Scheme (ADGS)
  • Targeted Relief and Recovery Facility (TRRF Loan Malaysia)
  • Bus and Taxi Hire Purchase Rehabilitation Scheme (BTHPRS)

 

These government guarantee schemes are much more beneficial to SMEs than conventional loans by a private FI. As up to 80% of the financing is obtained from the participating FIs (including principal and interest/ profit) by the Government of Malaysia, SME owners can expect a lower interest rate than private or unsecured loans.

Eligibility Requirements
To get approval for SJPP’s scheme, you will need to be a Malaysian citizen with at least 51% shares in an SME. Also, this SME must be registered and not have an annual income of more than RM500 million.

Purpose of Business Loan

Additional Working Capital
SMEs have struggled hard over the pandemic, having to penny-pinch to survive, but it’s hard to sustain without purchasing more inventory and assets, and paying off daily expenses. Businesses that have stumbled hard during the pandemic have the opportunity to rebuild and restructure their current financing facilities with a limit of RM20 million for the loan amount by purchasing more raw materials.

Increasing your working capital can help improve your cash flow. The COVID-19 Pandemic hit was a huge shock around the globe, and it cost businesses significantly. However unlikely it is that a crisis as bad will happen soon, it is good to have sufficient funds to pay your bills, face unforeseen circumstances or push your company through a rapid expansion.

New Financing
If you’re interested in expanding your business, our government schemes provide loans for new financing. Businesses can take loans with a financing amount limit of RM20 million per business with up to 10 years of the loan tenure. SMEs can use this loan for capital expenditures (CapEx) to acquire, upgrade and maintain assets.

SMEs cannot use this guarantee scheme as a government personal loan or refinance existing facilities granted by the same or other participating financial institutions.

Photos and Web Content by Primal Co., Ltd.

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