Grow Your SME: 5 Benefits of a Government Loan Malaysia

government loan Malaysia

Government business loans are very elusive to SMEs as they often do not require collateral, making them accessible to a wide range of businesses. Because they don’t require upfront collateral, the government will only lose money if you fail to repay the loan.

This makes government loans a safe investment for banks and other lenders, which makes it easier for small businesses to get the financing they need. Without the need for any personal financing, you will have the financial flexibility to invest in your business and grow it to the next level. Government loans can provide small businesses with the financial boost to grow and thrive.

Expand Your Business

A loan is a great way to finance your business goals to grow and improve. However, expansion can be expensive, and it’s not always easy to get funding. Fortunately, the government offers loans that can be used for a variety of purposes, including expanding your business, purchasing new equipment, and hiring new employees.

By providing financial assistance to help cover the monthly salary of your employees, you can encourage people to join your team and help grow your business.

They’re Easier to Obtain Than Traditional Bank Loans

When it comes to getting a loan approved, it can be rather difficult when you go directly to banks or a financial institution. Financial institutions and banks have a stringent set of eligibility requirements that an individual must meet to qualify for a loan. Government business loans are much more lenient, making them easier to obtain than traditional bank loans such as housing loans and personal loans. 

This is because government loans are designed to help Malaysians obtain a loan easier. For example, companies such as SJPP offer government guarantee schemes with eligibility requirements that only require a Malaysian citizen to own 51% of an SME to apply.

Low-Interest Rate and Longer Loan Tenure

Besides being difficult to get, traditional bank loans often come with high-interest rates and shorter monthly repayments. A government loan offer SMEs a lower interest rate than banks which is a more attractive option for them.

Also, banks and financial institutions provide longer loan tenures, allowing for smaller monthly repayments. A SMEs monthly payment decreases even more because government loans offer a lower profit rate. The longer loan period will also make it easier for your business to be eligible.

Available To Many Different Businesses

Government guarantee schemes provided by companies such as SJPP are available to many businesses of different sizes. They offer six schemes based on differing eligibility requirements. With their aim of being inclusive, they provide loans specifically for enterprises owned by women and Bumiputeras.

They also finance enterprises of different industries such as start-ups, export trade, and the automation and digital sector. As long as you are Malaysian, you will be eligible for at least one of their guaranteed schemes.

A loan can be a great way for SMEs to get the financing to grow their businesses. With all these benefits, a government guarantee scheme should be on the top of your list to start expanding your business.

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