IGuarantee Financial Credit Solutions, Loan and Credit Management

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Direct Access Guarantee Scheme

The Direct Access Guarantee Scheme or DAGS provides financing from RM50,000 to RM3 million. It provides a 100% guarantee for business entities or SMEs registered with SSM which covers public projects (ie: awarded by government, agencies, or GLCs).

Flexi Guarantee Scheme

The FGS is catered to SMEs in Malaysia, offering financing assistance under the Bank Negara Malaysia Funds for SME-All Economic Sectors Facility. This facility guarantees cover between 30 to 80% with no minimum amount up to RM5 million per SME up to a 5-year tenure.

Franchise Financing Scheme

The Franchise Financing Scheme (FFS) is catered for Malaysian companies (owned or controlled) with not more than RM1.5 million net assets or shareholder’s funds. This scheme is intended to help businesses fund their franchise business with a maximum loan of RM7.5 million.

Green Technology Financing Scheme

The Green Technology Financing Scheme or GTFS and the Green Technology Financing Scheme Islamic 2.0 ((GTFS – i 2.0) is a government initiative to help local businesses embark on green-technology projects.

This is in line with the national green technology agenda where the scheme is aimed at helping businesses use and sell more green technology products. This scheme can also be used to finance projects related to green technology.

Small Entrepreneurs Guarantee Scheme

This scheme comes with a 5-year maximum tenure. It is intended to help small businesses by offering guarantee cover for their credit facilities with commercial banks in the country. The maximum financing amount is RM50,000.

Only Malaysian SMEs that are registered with the SSM with good credit health will be eligible for this scheme that covers between 80 and 100% at a fee of 3 to 3.5% per year.

Tabung Projek Usahawan Bumiputera-i

The TPUB-I is a fund catered for Bumiputera enterprises. The entity must be a fully-owned business by a Bumiputera with a project or contract with the government or its related entities. On top of that, the Net Shareholders’ fund must be less than RM2,000,000.

The company must also be in operation for no less than 3 years with a no-loss record during that time. The financing amount for first-time applications can be up to RM3,000,000 and ensuing applications of up to RM5,000,000 up to a maximum of 5 years or the contract duration.

BizMula-I

The BizMula-i scheme provides direct financing funds that utilize the Bank Negara Malaysia pool for SMEs – All Economic Sectors Facility. It is catered for businesses in Malaysia which are have not more than 4 years in operations.

This scheme can be used for various reasons such as working capital or for the purchase of assets. The company must be a certified SME by definition and must have at least 51% Malaysian shareholding to be eligible.

BizWanita-I

The BizWanita-I, as its name implies is catered for women entrepreneurs in Malaysia. This scheme comes from the SMEs – All Economic Sectors Facility managed by Bank Negara Malaysia. It is intended to provide more financial assistance for women SMEs in Malaysia.

Applicants must be businesses owned by women with no more than 4 years in operations that can be used for working capital or acquisition of assets. On top of that, the company must have a 51% Malaysian shareholding.

BizBina-i

This scheme is one of the latest services offered for businesses that were affected during the recent COVID-19 pandemic. It is intended to help businesses that are cash-strapped and be used for working capital with a financing amount between RM20,000 and RM200,000.

It cannot be used for other reasons such as refinancing of current loans and such. The company must be a certified SME as defined by NSDC (National SME Development Council) and must have at least 51% Malaysian shareholding. The financing tenure is up to 5 years and 6 months at 3.5% per year.

BizMaju Scheme

This scheme is catered for Malaysian SMEs that meet the National SME Development Council’s (NSDC) definition of an SME with no less than 1 year in operation. The application meanwhile must have at least 2 years of managing a business of this nature.

The company must have a minimum of 51% of Malaysian shareholders. It comes with a loan amount between RM50,000 and RM500,000 which can be used either for the purchase of assets or working capital. The loan term is up to 5 years and comes with a BLR + 0% interest per annum.

BizJamin Scheme

This scheme is catered for Malaysian SMEs with at least 51% Malaysian shareholding and comes with a loan amount of up to RM15,000,000. It provides guaranteed coverage between 30% and 90%.

BizJamin Bumi Scheme

The BizJamin Bumi Scheme provides a loan of up to RM15,000,000 which can be applied by Malaysian SMEs with a minimum 51% Bumiputera shareholding. Its interest rate is up to 2% above the BLR per year.

BizSME Scheme

Offered to SMEs with at least 51% Malaysian shareholding, it can be applied by SMEs that meet the annual sales turnover and full-time employees criteria. The company must be operational for at least a year with a financing amount between RM50,000 and RM500,000.

This scheme can only be used for working capital with a 100% guarantee cover of up to 7 years term.

BizJamin SRF Scheme

This guarantee scheme is provided to help SMEs with their short-term cash flow problems that came about due to the COVID-19 pandemic. It can only be used for working capital and not for any other purpose.

Each SME can apply up to RM1,000,000 with an interest of 3.5% per year for a maximum term of 5 years and 6 months. The guarantee fee per year is at 0.5%.

BizJamin-i Scheme

This facility provides financing of up to RM15,000,000 and is catered for SMEs with a minimum of 51% local shareholding involved in ‘Halal’ activities.

BizJamin Bumi-i Scheme

This scheme is the same as the BizJamin-i Scheme but is only for companies with at least 51% Bumiputera shareholding.

BizJamin-i SRF Scheme

A scheme to help SMEs get through their cash flow problems due to the COVID-19 pandemic, this can be used solely for working capital. Each SME is eligible to apply up to RM1,000,000 with a profit rate of 3.5% per year of up to 5 years and 6 months.

Any entity be it individual or business will have to deal with loans and credit. This is an inevitable area which must be addressed as it contributes to the overall financial health and planning of the entity.

Loans refer to property, hire purchase, business and other borrowings from financial institution. While you might have engage a loan prior to carrying out any form of financial planning, recognizing your current loan situation and amortizing them makes a big difference on how you can continue maintaining a good financial status.

In terms of credit, this can refer to problems related to credit cards, building your credit status and issues relating to the likelihood of an individual or the business. Managing credit is to look into how far you are in clearing your debts and what your future options would be. For individuals, solving credit problems and building good credentials would be the main related issues.

The procedures in getting a loan

Loan refers to something that is borrowed especially money. In short, loan simply means debt. After a specific period of time, loan requires redistribution of financial assets. The process of loaning begins when an individual or more commonly known as the borrower acquires an amount of money from lender/principal. Bear in mind that over time, borrower must repay an equal amount of money or sometimes including interest.

In most situations, borrower will return the money on a regular basis called installments. Each payment made must carries the same amount. As mentioned previously, borrower must repay the loans together with interest which serves as an incentive between both parties.

When a borrower receives an amount of money from a legal firm, he or she must sign a contract that will list down obligations and restrictions called loan covenants. Basically, there are several types of loans available for borrower. Loans are usually categorized under secured or unsecured loan.

Secured loan

The term ‘secured loan’ refers to loan in which borrower pledges some asset in return for the loan. These assets usually come in the form of property to ensure that the borrower has the capability to repay it in a specific time in the form of monthly installments. In addition to that, borrowers will also pledge car as collateral for the loan.

Perhaps, one of the most widely known debt instrument is the mortgage loan. Mortgage loans are frequently used to purchase housing. The specific amount of loan is used to pay off the property. However, in most of these cases, lender or financial firms are given security which is lien on the title to the house.

The loan is active right until the mortgage is paid off. Thus, when the borrower lost the ability to pay installments, then financial firms have the rights to reclaim the ownership of the property and sell it to regain the specific sum.

In some situations, borrower may use up the loan to purchase car. The obligations and restrictions for purchasing a car is similar to mortgage loans. However, duration of loans for car is much shorter compared to mortgage loans. Financial firms such as banks usually offer two types of auto loans namely direct and indirect.

Bank gives loan directly to borrower for direct auto loans while indirect auto loans is whereby car dealership acts as an intermediary between the customer and financial firm. Among other secured loans available are stock hedge loan, pre-settlement loan and recourse note.

Stock hedge loan is a type of security lending in which borrower’s stock is hedged by the lender should the lender suffer loss while pre-settlement loan is a type of non-recourse debt whereby monetary loan is awarded during a lawsuit case. However, pre-settlement loan is only available in several lawsuit cases. Lastly, recourse note is used in most of the limited partnership agreements.

Unsecured loans

Unsecured loans are totally different from secured loans whereby monetary loans are not secured with borrower’s assets. There are several unsecured loans namely credit card debt, personal loans, corporate bonds, bank overdrafts and also credit facilities. Usually, rates for these loans vary as it depends solely on the lender.

Five types of financial loans by SME Bank

SME Startup

SME Startup is a type of financial loan suitable for entrepreneurs who would like to venture into manufacturing and also manufacturing-related services industry in Malaysia. The loan dispersion depends on the size of your company ranging from micro, small to medium.

In order to be eligible for SME Startup loans, borrower must think and create a unique idea and explain how it can turn into a profitable and rewarding business operation. The financing limit as pre-determined by SME is up to RM10 million. However, the loan amount is subjected to terms and conditions.

SME Franchise

To venture into franchising industry, it requires large amount of capital as it covers the rights to sell particular product and service that comes together with basic training and workshops to help beginners to flourish the business. However, conducted correctly, franchise often gives you rewarding returns in a specific period of time.

Thus, you need to run the business properly and pay attention in every single detail by acquiring guidance form Master Franchisor. Again, the biggest challenge to start up the business is to have capital. SME Bank is here to help you solve the matter and it offers up to RM3 million subjected to terms and conditions.

SME Professional

Unlike SME Startup, SME Professional is designed for the growing services sector in the country. According to a research conducted by an independent company in Malaysia, service sector by far is one of the fastest growing industries overtaking other sectors namely manufacturing sector in the past few years. SME offers loan up to RM10 million which is also subjected to terms and conditions. The introduction of this package is meant to assist entrepreneurs to set up their business in this sector.

SME Procurement

SME Procurement offers financial loan up to RM50 million will definitely help Original Equipment Manufacturers (OEMs) to compete against other conglomerates in the sector. In order to remain strong in the market, corporations need extra capital investment to expand the business. Thus, SME Procurement is here to help out those in need in terms of purchasing more equipment, hiring more skillful manpower and also to flourish the business.

SME Global

Lastly, the emergence of SME Global loan is meant to help ambitious young Malaysians to achieve their dreams of expanding and venturing into international market. Part of Ninth Malaysia Plan encouraged operators to venture into overseas market to help build reputation and image in international arena. Thus, SME Global offers up to RM50 million to facilitate companies in this specific area.

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