SME owners and managers seeking a business loan in Malaysia these days mainly fall into one of two categories. They are either people who launched their company just before the world was aware of COVID-19 and the havoc it would wreak on the world’s economies, or they are running a once-thriving business that was an asset and a job provider for their communities.
The thing about a viral pandemic is that it doesn’t play any favourites. It affects every business in a regional economy the same and collectively drives them to the brink of bankruptcy.
Syarikat JaminanPembiayaanPerniagaan (SJPP), is a wholly-owned subsidiary of the Minister of Finance Incorporated. It was formed to act as a source of much-needed financing when Malaysia was experiencing the same sort of economic downturn that’s been brought on by the quarantines, lockdowns, and closed borders that the pandemic is imposing on the country today.
Working Capital Guarantee Schemes Cover All Sectors of Industry
There are nine different working capital guarantee schemes that are designed to meet the needs of the privately-owned SME’s of the country. They include:
- Working Capital Guarantee Scheme (WCGS)
- Working Capital Guarantee Scheme – Start Up (WCGS-SU)
- Working Capital Guarantee Scheme – Bumiputera (WCGS-B)
- Working Capital Guarantee Scheme – Export (WCGS-X)
- Working Capital Guarantee Scheme – Women (WCGS-W)
- Automation & Digital Guarantee Scheme (ADGS)
- Special Schemes for COVID-19 under BNM
- PENJANA Tourism Financing Facility (PTF)
- Bus and Taxi Hire Purchase Rehabilitation Scheme
The five working capital guarantee schemes have financing tenures of 15 years, or until 31stDecember, 2035, whichever is sooner. The loans are for working capital or capital expenditures only. They cannot be used to repay outstanding debt.
Borrow Through Your Usual Lending Institution
The schemes are set up as a government resource that lenders can use to offer loans while still protecting their won business interests. Interested parties apply through any of a number of public financial institutions in Malaysia.
The loan is issued by the lender, and re-payments are made to the lender. SJPP does not provide credit or financing facilities. It is up to the discretion of the financial institution (FI) to issue the loan using their own resources. If the applicant doesn’t have sufficient collateral, the FI can pass the application on to SJPP for review. Any additional information or qualification requests will be made to the FI and then communicated to the applicant.
These loans are a great relief to newly-launched businesses that could not have foreseen the difficulties of starting a company in the face of overwhelming odds. These new companies did everything right; they just did it at what turned out to be the most inopportune time.
For established businesses that serve as local employers, these loans can help maintain the community a much-needed input of funds that benefits owners, managers and employees.
If you think your business in Malaysia would be a prime candidate for a working capital guarantee scheme loan, and you want to learn more about them, contact your local financial institution or visit the SJPP website.