There are many funding options for entrepreneurs in Malaysia be it startups or the seasoned entrepreneurs. Usually startups would get stuck at this stage where they use up their own savings to start their business. While the success of getting da loan depends on many factors such as “related experience on your future business” or collateral whatsoever, many avenues are available fo entrepreneurs to obtain funding.
Below are the types of common funding types:
- Incentives: In short, these can be called reliefs just like candy. Typical incentives in terms of financial are like 100% Investment Tax Allowance or tax exemption on your statutory income.
- Grants: Non-repayable funds for specific areas with agreed conditions.
- Loans: Repayable funds with interest or financing charges.
- Capital Financing @ Equity Financing: A company or someone invests their money in terms of shares into your company.
For small businesses, you can try and go for micro loan. This loan is usually RM50,000 below and depends on the financial institution, you would have to get a guarantor. Do not confuse yourself with conventional loan.
Alright let’s get some simple equation running so you won’t get confused (conditions vary for different financial institutions but these are the norms);
- Micro Loan (RM50k below): You need guarantor
- Conventional Loan (RM50k above): You need guarantor plus collateral
So what is collateral? Collateral are basically securities you pledge to the bank. In case you can’t pay your loan, the bank would have the right to take your collateral. Collateral could be your fixed assets (house, land), fixed deposits or company guarantee.
For micro businesses, it would be easier to obtain funding for micro loan as getting collateral is not easy.
So Where do I get to apply for all these funding opportunities?
- Government agencies (SMIDEC, MIDF, MTDC, MAVCAP, etc)
- Bank (Maybank, CIMB, Standard Chartered, etc)