Malaysian small enterprises can get money in two ways: through SME loans and microfinance schemes. Even though both try to help people get money, there are some differences between the two.
Once you have your business idea, securing the money to fund it can be tricky. With so many different business loans and funding schemes available in Malaysia, it’s hard to know where to start.
SME loans and microfinance programmes are used for different things and have varying eligibility conditions, loan amounts, repayment durations, interest rates, and ways to apply. Before choosing which choice to go with, business owners should carefully look at their financial demands and their eligibility.
SME Business Loans in Malaysia
SME loans are usually given by commercial banks or other financial organisations. They are made to help small and medium-sized businesses satisfy their financial demands. Compared to microfinance schemes, these loans usually offer higher loan amounts, longer time to pay back the loan, and cheaper interest rates. To get a SME loan, you often need collateral or an excellent credit score, and the application procedure can be longer.
The Malaysian government has also implemented multiple initiatives to help small and medium enterprises (SMEs) grow. From matching grant schemes to soft loans with low-interest rates, various financing options are available for businesses of all sizes.
Microfinance Programmes
These loans can be used for a variety of purposes, such as working capital, business expansion, or even to purchase new equipment.
Most of the time, these programmes are run by non-profits or government agencies. They give smaller loan amounts, shorter time periods to pay them back, and higher interest rates than SME loans. Most microfinance programmes do not require collateral and have less strict rules about who can get them.
One of the best things about microfinance loans is that they have a very low-interest rate. In fact, the average microfinance loan in Malaysia has an interest rate of just 6.5%! This makes them a great option for businesses that are looking to save on their financing costs.
Conclusion
Whether you’re looking for an SME loan or a microfinance loan, there are a variety of financing options available for businesses in Malaysia. The best way to find the right loan for your business is to compare rates and terms from multiple lenders. Be sure to review your financial projections before applying so you can be sure you’re getting the best deal possible.
About Limra Assets
Limra Assets is a Shariah-compliant financing solutions financier that provides loans for property financing, SME businesses loans and gold investment. We offer a range of financing options to help individuals and businesses, including alternative financing for businesses that are unable to obtain funds. Our goal is to provide access to funds for investments in a Shariah-compliant manner that focuses on transparency, customer service, and competitive rates, Limra Assets can be a valuable partner in your gold investment journey.
If you’re interested in learning more about Limra Assets and our Shariah-compliant financing solutions for property purchases, gold purchases or business loans, please contact us for more information.
Disclaimer:
It is important to note that taking out a loans for any purchases and gold investment, whether through Limra Assets or any other lender, carries risks and should be approached with caution. It is important to carefully consider your financial situation and investment goals before taking out a loans, and to ensure that you fully understand the terms and conditions. Additionally, investing in gold carries its own risks and should be done with the guidance of a financial professional. This information and all external links are provided for educational purposes only and should not be considered financial advice.