Government-backed loans provide lifeline for Malaysian businesses

KUALA LUMPUR: Securing financing is crucial for business expansion, and in Malaysia, Term Loans offered under the Madani programme have emerged as a popular choice. These loans are bolstered by guarantees from key agencies such as Syarikat Jaminan Pembiayaan Perniagaan (SJPP) and Credit Guarantee Corporation (CGC), covering up to 80 percent of the loan amount.

According to Edison Chong Wei Kit, SME Team Manager at Intelligent Consultancy, the government backing significantly reduces risk for banks, paving the way for competitive interest rates that can be as low as three percent. "Banks are leveraging this programme to attract more customers by highlighting competitive pricing," said Chong on Niaga AWANI.

"Once potential borrowers express interest, bankers then explain the role of SJPP and CGC in securing the loan, ensuring a smoother application process."

Easing the Path to Business Loans

Intelligent Consultancy specialises in helping business owners secure bank facilities, often exceeding what clients could achieve independently. "We assist our customers in obtaining two to three times the loan amount compared to what they might achieve on their own," said Chong.

He highlighted challenges in loan approval, such as industry-specific requirements and issues with documentation. "Different industries have specific financing needs, which can make it challenging for some businesses to qualify," he pointed out. "Incomplete or inaccurate documentation can also cause delays or even lead to rejected loan applications."

To enhance the chances of securing necessary funds, businesses are advised to have a clear financial strategy outlining their needs and how the loan will contribute to achieving their goals. "Having a clear financial plan and applying for loans proactively, before cash flow becomes an issue, can significantly improve your chances of success."