Small and Medium-Sized Enterprises (SMEs) are the backbone of any economic system. They account for the majority of businesses owned in the world while creating more jobs and fuelling a country’s economy. However, the economic crisis caused by the pandemic has hurt many SMEs around the globe.
As we move into the endemic phase, most industries are allowed to reopen, which means your business has a good chance of taking off. More working capital is needed to rejuvenate your business, but unfortunately, it’s getting harder to get more business funding. Without sufficient capital, banks are reluctant to give out business loans. Syarikat Jaminan Pembiayaan Perniagaan (SJPP) is here to help you through this issue.
SJPP is a company wholly owned by the Ministry of Finance that bridges the gap between SMEs and Financial Institutions (FI) by approving bank loans and providing government guarantee loans. Here’s how you can apply for a Malaysian government guarantee business loan to help your business venture!
Type of Loans and Financing Limits
SJPP have six business loans at more than 21 FIs to aid Malaysian business owners build their business. Each loan has up to 80% guarantee coverage at up to 1% guarantee fees per annum.
Working Capital Guarantee Scheme
This scheme is eligible for SMEs with at least 51% shares held by a Malaysian with a financing limit of RM10 Million. It also comes with a 1% guarantee fee per annum, a 70% guarantee coverage with a financing tenure of up to 15 years.
Working Capital Guarantee Scheme – Start-Up (WCGS-SU)
This scheme is eligible for SMEs within 6 months to 2 years of operation with a financing limit of RM500,000. It also comes with a 0.75% guarantee fee per annum and a 70% guarantee coverage.
Working Capital Guarantee Scheme – Bumiputera (WCGS-B)
This scheme is eligible for SMEs with at least 51% shares held by a Bumiputera with a financing limit of RM3 Million. It also comes with a 0.75% guarantee fee per annum and an 80% guarantee coverage.
Working Capital Guarantee Scheme – Export (WCGS-X)
This scheme is eligible for SMEs with at least 30% turnover on export-based businesses. It also comes with a 0.75% guarantee fee per annum and an 80% guarantee coverage.
Working Capital Guarantee Scheme – Women (WCGS-W)
This scheme is eligible for SMEs with at least 51% shares held by a Malaysian woman with a financing limit of RM1 Million. It also comes with a 0.75% guarantee fee per annum and an 80% guarantee coverage.
Automation & Digital Guarantee Scheme
This scheme is eligible for SMEs with at least 51% shares held by a Malaysian with a financing limit of RM10 Million. It also comes with a 0.75% guarantee fee per annum, an 80% guarantee coverage.
Who Is Eligible to Apply for A Malaysian Business Loan
This government guarantee business loan is aimed specifically at Small and Medium-Sized Enterprises (SMEs) in Malaysia. Non-manufacturing SMEs are businesses with a sales turnover that doesn’t exceed RM20 million and cannot exceed 75 workers. An SME in the manufacturing industry is given more leeway as their sales turnover cannot exceed RM50 million and not exceed 200 workers.
SMEs that apply must be private limited companies with a business registration certificate because any public-listed companies on the main board, multinational corporations (MNCs), government-linked companies (GLCs), Syarikat Menteri Kewangan Diperbadankan (MKDs); and state-owned enterprises are not eligible for this scheme.
How To Apply For a Government Guarantee Business Loan
Now that you know the different types of government business loans offered by SJPP, let’s find out how you can apply for one for your SME. If you have a majority Malaysian owned SME in the manufacturing or non-manufacturing industry, you must ensure that your business qualifies for the financing facility. You must consult your banker or one of SJPP’s many participating FIs to see if you are eligible.
Next, you will need to provide any necessary documents required by the participating FIs. After your financing facility is approved, a copy of the entire financing paper will be submitted to SJPP by the FIs for further evaluation to obtain the guarantee cover.