Soft Loan for SMEs (SLSME): Malaysia SME Should Know About

Soft Loan for SMEs (SLSME): Malaysia SME Should Know About

Soft Loan for SMEs (SLSME): A Comprehensive SME Loan Malaysia

The soft loan for small and medium enterprises is a loan program in Malaysia targeting at SMEs. Being an incentive from the government, this program has been taken as a very reliable source of loan funding for SMEs in Malaysia and many businesses have benefited from it. So, if you are an owner or an investor in an SME in the country, this is one of the few loan incentives you must know about, and we provide you everything you need to know about the Soft Loan Scheme For SMEs (SLSME).

Soft Loan Scheme For SMEs (SLSME): What Is It All About?

The soft loan scheme for SMEs (SLSME) is a loan inventive in Malaysia, which helps the scalable small to medium enterprises in the country, with loan funds for Project financing, Working capital, capital expenditure and Information Technology. Besides, the maximum amount depends on what type of financing the SMEs intend to get from the incentive. Below is a list of it.

  • Project financing: RM 5 million
  • Capital expenditure: RM 5 million
  • Working capital: RM 3 million
  • IT hardware and software: RM 500,000

For all these grants, the financing rate is 4% per annum.

Soft Loan for SMEs (SLSME): Malaysia SME Should Know About

Financing Tenure

The tenure depends on the type of business or on what exactly the loans are spent. Here is the list depicting the financing tenure in this program.

  • Land And Buildings: Maximum 25 years with a grace period of up to 2 years.
  • Machinery equipment or Industrial Plants: Up to 7 years including a grace period of up to one year.
  • Information Technology (Hardware and Software): Up to 4 years with a grace period maximum one year.
  • Revolving Working Capital: Up to 150 days for each draw, with an option to roll over a period up to two months for eligible borrowers.
  • Factoring: A maximum of 150 days.
  • Term financing working capital” Up to 3 years, and a grace period of up to 6 months.
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Eligibility:

  • The company should be incorporated in Malaysia under the Companies Act 1965 or
  • Registration of Business Ordinance 1956.
  • At least 60% of the equity should be held by Malaysia citizen(s).
  • Should have a premises licence
  • In case the SME has shareholdings, they must not be more than 20% held by the public companies.

If your SME meets the above requirements, you could move on to the application procedure for the Soft Loan Scheme For SMEs (SLSME).

How to Apply

You will have to approach Malaysian Industrial Development Finance Berhad (MIDF), the financial partner for the loan scheme. Make an application that states clearly why you need the loan and also you will have to include information like company profile, legal status, documentation, business plan and every other information that show you meet the requirements and your business is scalable.

During the application process, MIDF will send an inspector to your company premises, who will be checking the business layout, status, machinery, technology and premises to make sure that they are putting their money in the right company. Also, while they process your application, a credit verification will be done.

So, this is it for the information you need for the SLMSE. I hope this article will help you and your business. Also, to learn more, you may read about SMEs in Malaysia.


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