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Where to find grants for SME in Malaysia?
For some entrepreneurs, they need some money to fund or scale up their businesses.
There are several ways to get financial aid for your business. One of them is government grants for SME Malaysia.
Scroll down to see the list of SME grants you can apply.
12 Government Grants For SME Malaysia
1) Soft Loan Schemes for Services Sector (SLSSS)
The SLSSS is aiming to provide financing aid for start-up enterprises and service sectors who want to enhance their services to higher value.
It is a financial loan for CAPEX and working capital, with an interest rate of 4% per annum for SMEs and not exceeding RM5 million.
Eligibility Specification:
- Integrated companies under Companies Act 1995
- Companies registered under Registration of Business Ordinance 1956
- Services providers registered under Certificate of Practice any Professional Regulatory Bodies.
- Malaysians held at least 60% of equity.
- Own a valid premises license.
2) Soft Loan for SMEs (SLSME)
The SLSME is assisting loans for start-up enterprises and existing companies including to support fixed assets and working capital financial.
Eligibility Specification:
- SMEs incorporated under the Companies Act 1965
- SMEs incorporated under Registration of Business Ordinance 1956
- Malaysians held at least 60% of equity
- Owns a valid premises license
- Owns SMEs with shareholdings which not exceeding 20% held by public-listed companies. Only if applicable.
Focusing on sectors of areas such as Manufacturing, Manufacturing-Related Services and ANY Services, but EXCLUDE insurance and financial services.
The financing amount given under the scheme depends on the type of finance provided – Project, Fixed Assets, Working Capital and IT Hardware / Software.
The financial minimum amount is RM 50,000, but the interest rate is 4% per annum yearly.
Project: RM5 millions (maximum)
Fixed Assets: RM5 millions (maximum)
- Up to 90% of the cost of new assets
- Up to 65% for used / reconditioned equipment, which are not more than 5 years old.
Working Capital: RM3 millions (maximum)
- Up to 100% for Purchase Revolving Credit
- Next, up to 90% for Term Financing
- Up to 80% for Sales Revolving Credit
IT Hardware / Software: RM 50,000 (maximum)
- Up to 90% of the cost of new assets
- Up to 65% for used / reconditioned equipment, which are not more than 5 years old.
3) Tabung Usahawan Siswazah (TUS)
The TUS or also known as graduate entrepreneurs’ scheme is providing loans to these fresh entrepreneurs to keep off with their start-up business.
By this way, more people would be interested to start the business.
The fund loan given by the scheme depends on the nature of enterprises but the loan funding for start-up is usually between RM 20,000 to RM 250, 000.
Meanwhile the interest rate of the borrowers’ repayment is 4% within ten years given.
Eligibility Specification:
- Malaysian citizen
- At least own a diploma holder in any degree recognized by Malaysian Qualification Register (MQR)
- Graduation time: not exceed 15 years old
- Age of an individual: not more than 40 years old
4) Young Entrepreneur Fund (YEF)
The main purpose of loan funding by YEF is to help the young entrepreneurs to start their new business and fulfil the needs for their existing enterprises.
Nevertheless, YEF is focusing more on the Shariah Financing concepts. For instance; Bai’ Inah, Bai’ Bithaman Ajil, Ijarah, Ijarah Thumma Bai’ and Bai’ Istina.
Margin of Financing for:
- Working Capital: Up to 100%
- Business Operation Asset: depends on the condition of equipment such as, Brand new tools – up to 95%, and Reconditioned or Used tools – up to 70%
Still, the financials are limited to the range of RM20, 000 to RM100, 000, but gain the net profit rate around 5% per annum.
Eligibility Specification:
- Malaysian citizens who age between 18 to 30 years old, owning a business.
- Business is registered with Suruhanjaya Syarikat Malaysia (SSM) – include sole-proprietorship, partnership firm or Sdn Bhd company.
- Partnership firm / Sdn Bhd company: the applicant must obtain more than 51% shares or majority shares in the company.
- Own at least an entrepreneurship or vocational certificate.
- Start-up companies that operated less than 1 year will be considered.
5) Tabung Pembangunan Pengangkutan Awam (TPPA)
The TPPA scheme is to provide a fund loan for the public transportation business including the commercial bus and taxi operators in Malaysia.
The scheme is financing individual entrepreneurs, companies, cooperatives and firms that match their services towards public transportation.
Nevertheless, the financial is only limited to a certain amount (also depends on what kind of services offered by the company), which varies from RM30, 000 to RM 10 millions.
Eligibility Specification:
- The fund is only for the company or business that offers services and operates the public transportation such as bus, taxi, etc.
- Should registered with SSM under the Commercial Vehicle Licensing Board Act 1987 (Act 334)
- Should registered with Lembaga Pelesenan Kenderaan Perdagangan (LPKP) and have Surat Tawaran Kelulusan (STK) from LPKP.
The financing loan period varies according to type of transportation. As for the bus, it is up to 10 years, except for the 8-year express bus.
Addition to that, LPKP has fixed the financing period, which cannot exceed the remaining life of the transportation.
6) Bumiputera Enterprise Enhancement Programme (BEEP)
The BEEP is aiming to help build and develop the Bumiputera SMEs throughout the integrated assistance including reinforced the SME’s core business.
Eligibility Specification:
- Should be registered under SSM / Professional Bodies / Authorities or District Offices in Sabah and Sarawak.
- Fulfilled the definition of SME in terms of annual sales turnover and scope.
- Bumiputera owns the 60% of equity
- Own a valid business premise license
- No conflict of interest with the supplier.
- Under operation for at least 6 months
- Have a SCORE / M-CORE assessment.
7) SME Emergency Fund (SMEEF)
A loan fund that helps the SMEs in the country after unfortunate incidents such as natural disasters affected their enterprise.
The fund only reaches an amount of RM100, 000, which covers the disaster such as floods, drought, beach erosion, etc.
The SMEEF also helps the business to rebuild back after the disaster events, such as;
- Fixing the electricity
- Renovating the premises, doors, windows, floors, etc.
- Fixing any furniture that was affected in the premises
- Fixing the machinery and tools
No worries, SMEEF will lend their help by providing the working capital expenses and aid you to replace the broken / damaged equipment with the brand new ones.
Eligibility Specification:
- Should be registered with SSM under Companies Act 1960 or Business Registration Act 1956.
- Should at least 60% of the equity funds based in Malaysia.
- Owns valid business premise
- Should operating the business in disaster areas (declared by National Security Council or other district offices)
- Own the evidence that the business has been affected by the natural disaster.
- Owns a letter issued by District Officers.
- Owns a verification report from SME Corp Malaysia.
8) Business Start-up Fund (BSF)
The BSF has been established to help fund new start-up technology-based companies, following to match their main objectives.
Their objectives are to remove unnecessary obstacles and develop a growth in the business in the company.
Therefore, they provide the fund raising to these companies with the amount up to RM5 million or 90% of total cost of project. This funding period lasts for 6.5 years only.
However, 5 years are given for repayment period instead.
Eligibility Specification:
- Should be incorporated under the Companies Act 2016.
- Should a technology-based company – own a minimum of 70% Malaysian shares.
- The product or service must be significant in novelty / innovation.
9) TEKUN Financing
The TEKUN Financing scheme helps to provide a loan fund or programme to aid youths who get involved in Farming and Agro-based Industries.
Two financing schemes conditions provided by TEKUN Financing, which are:
- Small Loan Scheme (SPK) – RM10, 000 until RM 50, 000. Up to 5 years of payment period.
- Medium Loan Scheme (SPS) – RM50, 000 until RM 100, 000. Up to 10 years of payment period.
Still, the repayment period is in between 6 months to 10 years and the entrepreneurs are required to pay TEKUN Financing from a total of 4% of the loan per annum throughout the loan period.
Eligibility Specification:
- Bumiputera and Malaysia citizen
- Aged between 18 to 60 years old
- Not a bankrupt applicant
- 100% owns by a Bumiputera
- Own valid licence / permit / SSM
- Have specific business location or premise / mobile business
- Engage directly and part time in business.
- Should be one financing only for one household company.
The best thing about TEKUN financing, the entrepreneurs will be protected under Loan Insurance and Life & Accident Insurance set by TEKUN Nasional within the loan period.
10) Skim Kredit Pengeluaran Makanan (SKPM)
The SKPM mostly funds loans towards who wants to develop more on the Food Business background of Food Industries in Malaysia.
Thus, they have been trying to help food production of SMEs to enhance their productivity and reach the business to a higher market level.
Eligibility Specification:
- Should be incorporated in Malaysia with SSM under Akta Syarikat 1965
- Can be sole-proprietorship or partnership
- Owns a valid business premise license
- Only Malaysian citizen are allowed to apply for the scheme
- Can be individual or non-individual (food business based)
- Should have at least 15% Malaysian ownership
With this scheme, SMEs gained loan up 100% according to their total project cost, which exceeded RM500, 000.
Besides, the fund is fixed at 3.6% per annum in the duration of 8 years.
11) Rural Economy Funding Scheme (SPED)
The SPED collaborated with other financing programmes with the Ministry of Rural Development while aiming to help Bumiputera SME entrepreneurs in rural areas.
The entrepreneurs have a huge opportunity to expand and develop their business to the next level with this fund.
The financial loan for SPED is financial concept based on:
- Commodity Murabahah Term Financing-i (CMTF-i)
- Commodity Murabahah Revolving Financing (CMRF-i)
- Ijarah Thumma Bai’ (ITB)
- Kafalah Bank Guarantee.
SPED focusses on giving loan up to 90% for Fixed Asset and up to 100% for the company’s working capital for 3 to 7 years.
Thus, the financial limit only ranges up to RM 250, 000 to RM 500, 000 per application. As for the net profit, it rates for 5% per annual.
Eligibility Specification:
- Should be operated in rural areas identified by KKLB
- Be owned by Bumiputera
- Registered under the Companies Commission of Malaysia Act 2002 or Co-operative Societies Act 1993
- Should obtained business license from local authority
- Should obtained business premise that separate from residential
12) PROSPER Usahawan Muda (PUMA)
PUMA is a scheme that provides young Bumiputera to begin their business while scheduling them under several training programs.
These programs help these entrepreneurs to develop their entrepreneurial skills and assist them to choose their ways of approaching the business market.
They gave a chance to Bumiputera who wants to start up their business by providing the funds up to RM 100, 000.
The funds will be running for ten years (maximum) and it is based on Shariah concept instead.
Eligibility Specification:
- Applicant must be a Bumiputera
- Applicants must be in the range of age between 18 years old until 35 years old.
- Applicant must be ready to prepare and capable to invest money, at least RM500
- Applicant must be ready to attend on every training developmental program organized under this fund scheme
- Applicants must have good and clean financial records.
- Enterprise: Should be incorporated in Malaysia and registered under SEM, own every license that is required to start-up the business, not illegal and follow the Shari’ah compliant.
Conclusion
With all of these government grants listed above, you may choose one of them and receive a loan fund to boost your business success.
To approve your SME entrepreneurship loan, lenders need to be convinced with clear cash flow, especially when you are new in business.
When you are starting a business, there are several aspects of the operation you might need to manage properly right from the get go.
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