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Best Business Loans: Compare SME Loans and Microfinance Schemes

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Once you have your business idea, securing the money to fund it can be tricky. With so many different business loan and funding schemes available in Malaysia, it’s hard to know where to start.

We’ve got you covered! With this guide on the best business loans in Malaysia, you’ll be able to compare SME loans and microfinance schemes to find out which will get you the best rate with the lowest monthly payments – all in just a few clicks.

Business Loans in Malaysia

Malaysia is one of the most thriving economies in Southeast Asia, and it has been ranked 12th on this year’s Doing Business Report by The World Bank.

The report highlights the ease of doing business, including incorporating your company, electric connections, and getting building permits. These factors help you expand into new markets with little effort on your end!

This year, 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.

One of the most popular financing options for businesses in Malaysia is the SME Bank Loan. This is a loan that is specifically designed to help small and medium enterprises grow. The government-linked bank offers up to RM5 million in financing with a competitive interest rate!

Another great option for businesses in Malaysia is the microfinance loan. Microfinance loans are small, unsecured loans typically given to entrepreneurs with low incomes. These loans can be used for a variety of purposes, such as working capital, business expansion, or even to purchase new equipment.

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 who are looking to save on their financing costs.

How To Start A Business In Malaysia?

Starting a business in Malaysia is relatively easy, thanks to the government’s initiatives to help small businesses grow. All you need to do is follow these steps:

1) Make a Business Plan:

The first step to starting any business is to create a business plan. This document will outline your business goals, strategies, and how you plan on achieving them.

2) Review Your Financial Projections:

Once you have your business plan, reviewing your financial projections is next.

This will allows you to determine how much money you need to start your business and how much you can realistically expect to earn in the first year.

3) Choose The Right Business Structure:

The next step is to choose the right business structure for your company. This decision will be based on a number of factors, such as the size of your business, your business goals, and the amount of liability you’re willing to take on.

4) Register Your Business:

Once you’ve chosen your business structure, the next step is to register your company with the Companies Commission of Malaysia (SSM). This can be done online or in-person at any of their offices.

5) Get A Business Loan:

The final step is to get a business loan. This will give you the capital you need to start your business and help you achieve your goals. There are a variety of financing options available, so be sure to compare rates and terms before choosing one.

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.

The Best Loans for SME Businesses

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Are you a small-and-medium-sized enterprise that needs funds for your commercial activities? If so, then Malaysia’s top banks and development financial institutions have what it takes to increase net working capital.

With an SME loan from one of these reliable sources, customize your business finance plan today in order to improve credit ratings with on-time low-interest repayments!

What is SME?

SME is an acronym for small and medium-sized enterprises. In Malaysia, an SME is defined as a company with full-time employees not exceeding 200 and with paid-up capital below RM50 million or annual sales turnover not exceeding RM250 million.

The SME Development Division of the Ministry of International Trade and Industry (MITI) is responsible for formulating and coordinating policies and initiatives to develop SMEs, In Malaysia. 

In order to qualify as an SME, your business needs two things: sales turnover and the number of full-time employees.

This will depend on what sector you are in economically; there are different criteria for each one!

Does SME matter in Malaysia?

SMEs are the backbone of the Malaysian economy, accounting for 99% of total business establishments and employing 58% of the country’s workforce. In 2016, SMEs contributed to 38.5% of Malaysia’s GDP.

In 2019, the Malaysian government introduced the SME Masterplan to increase the contribution of SMEs to GDP to 41% by 2025. The masterplan has 4 pillars:

  • Strengthening the SME ecosystem
  • Enhancing competitiveness
  • Accelerating growth
  • Creating a conducive environment for SMEs

The government has also set up various initiatives to support SMEs, such as the SME Development Fund, the eRezeki, and eUsahawan Programme, the SME Loan Guarantee Scheme, and the SME Working Capital Guarantee Scheme.

What Are The Challenges Faced By SMEs In Malaysia?

The most common challenge faced by SMEs is access to financing. This is because banks and financial institutions tend to be more risk-averse when lending to SMEs, as they are considered high-risk investments.

Other challenges faced by SMEs in Malaysia include:

  • Lack of skilled workers
  • Red tape and bureaucracy
  • Lack of awareness of government assistance programs
  • High cost of compliance
  •  Lack of access to finance and capital

Why Should You Consider an SME Loan?

There are many reasons why you should consider an SME loan, such as:

1) To start up your business:

If you plan to start a business, an SME loan can provide the capital you need.

2) To expand your business:

If you are looking to expand your existing business, an SME loan can provide the funds you need for expansion.

3) To buy new equipment:

If you need new equipment for your business, an SME loan can help you purchase the equipment you need.

4) To improve your cash flow:

An SME loan can help you improve your cash flow by providing working capital to cover expenses such as inventory and accounts receivable.

5) To consolidate debt:

An SME loan can help you consolidate your debts into one monthly payment if you have multiple debts.

Best SME Loan In Malaysia?

Conclusion

If you are looking for an SME business loan, there are many factors you need to consider, such as the interest rate, repayment period, and the type of loan that best suits your needs. To get the best SME loan in Malaysia, be sure to compare different loans from different lenders before making a decision. So, if you are a small or medium-sized business owner in Malaysia looking for the best property loan to grow your business, then an SME loan is the best choice for you!

The Best Islamic Personal Loans | A Complete Guide

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Taking out a personal loan can be confusing and stressful, especially when you’re not familiar with the process or the terminology involved. It’s also easy to become overwhelmed by the seemingly endless number of options available to you. Whether you’re looking to finance an upcoming vacation, pay some medical bills, or buy a new home, Islamic personal loans may be your solution. Here’s everything you need to know about Islamic personal loans and how to find the best one for your needs.

What Are Islamic Personal Loans?

Islamic personal loans are a type of financing that is based on the principles of Shariah, or Islamic law. These loans are sometimes referred to as Shariah-compliant, Muslim, or halal loans.

Shariah prohibits the charging of interest, or riba, on loans. As a result, Islamic personal loans typically involve a fee for service rather than interest. This fee is often calculated as a percentage of the total loan amount and is paid upfront.

In addition to not charging interest, Shariah-compliant loans also typically prohibit other activities considered harmful, such as gambling, speculation, and deceit.

How Do Islamic Personal Loans Work?

Islamic personal loans work in much the same way as traditional personal loans. You borrow a lump sum of money from a lender and agree to repay the loan, plus any fees or charges, over a set period of time. The main difference is that Islamic personal loans don’t charge interest.

Instead of interest, Shariah-compliant lenders typically charge a fee for service. This fee is often calculated as a percentage of the total loan amount and is paid upfront. For example, if you take out a RM10,000 loan with a 3% fee, you would pay RM300 at the time of borrowing.

The fees charged by Shariah-compliant lenders can vary widely, so it’s important to compare offers from multiple lenders before choosing a loan.

Difference Between Islamic Personal Loan And Conventional Personal Loan?

The main difference between Islamic personal loans and conventional personal loans is that Islamic personal loans don’t charge interest. Instead, these loans typically involve a fee for service, which is often calculated as a percentage of the total loan amount.

Another key difference is that Islamic personal loans are based on the principles of Shariah, or Islamic law. This means that these loans are subject to certain restrictions, such as the prohibition of riba (interest), gambling, speculation, and deceit.

As a result of these differences, it’s important to compare offers from multiple lenders before choosing a loan.

Benefits Of Islamic Personal Loan:

There are a few key benefits of Islamic personal loans that make them an attractive option for borrowers:

1) No interest charges:

One of the main advantages of Islamic personal loans is that they don’t charge interest. This can save you significant money in the long run, as interest charges can add up quickly.

2) Shariah-compliant:

Another benefit of Islamic personal loans is that they are Shariah-compliant. This means that these loans are subject to certain restrictions, such as the prohibition of riba (interest), gambling, speculation, and deceit.

3) Flexible repayment terms:

Islamic personal loans also offer flexible repayment terms. This means that you can choose a repayment schedule that fits your needs and budget.

4) Fast and easy to apply for:

Applying for an Islamic personal loan is typically fast and easy. You can apply online or in person at a lender’s office.

5) No collateral required:

Most Islamic personal loans don’t require collateral. This means that you won’t have to put up your home or car as security for the loan.

Drawbacks Of Islamic Personal Loan:

There are a few potential drawbacks of Islamic personal loans that you should be aware of before you apply:

1) Higher fees:

One potential drawback of Islamic personal loans is that they often come with higher fees. This is because Shariah-compliant lenders can’t charge interest, so they make up for it with higher fees.

2) Shorter repayment terms:

Another potential drawback of Islamic personal loans is that they often have shorter repayment terms. This means that you may have to repay the loan more quickly than you would with a conventional loan.

3) Limited availability:

Islamic personal loans are not available from all lenders. This means you may have to shop around to find a lender that offers this type of loan.

4) Stricter eligibility requirements:

Islamic personal loans often have stricter eligibility requirements than conventional loans. For example, you may need to have a good credit score or meet certain income requirements.

Conclusion

Islamic personal loans can be a great way to get the money you need without paying interest. However, it’s important to research before choosing a lender to find the best deal for your needs. We hope this Islamic financing guide has helped you understand what to look for in an Islamic personal loan and given you some ideas about where to start looking. We also have a guide on Islamic business financing and Shariah-compliant home loans if you want to apply for a business loan or property loan. You can also find more general information about Islamic banking and finance on our blog.

Get to Know Islamic Finance: How It Works and Why It’s Beneficial

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Islamic finance isn’t widely known in the United States and Europe, but its principles have been used in Islamic countries for hundreds of years. In fact, many experts feel that Islamic finance may be one of the best options available to Muslims living in Western countries who wish to be compliant with their religious values and laws. If you’re considering incorporating Islamic finance into your business, here’s what you need to know about how it works and why it’s beneficial.

What is Shariah law?

The word shariah simply means the way. In reference to Islam, shariah is not a set of fixed rules but serves as an overarching concept that helps Muslims better understand how God wants them to live their lives. Shariah law is a moral guide developed over centuries of study and debate by Muslim scholars. There are numerous interpretations of shariah, but they all center around similar themes such as compassion, fairness, and honesty.

Five key principles make up shariah law:

  1. Tawhid: The belief in the oneness of God
  2. Uluhiyyah: The worship of God
  3. Risalah: The belief in the prophets of Islam
  4. Adl: The principle of justice
  5. Ihsan: The idea of doing good for the sake of God

These principles are reflected in the way Islamic finance works. For example, tawhid is the basis for the prohibition of Riba, which will be discussed later. The principle of adl dictates that all contracts must be fair and just, while ihsan reminds Muslims that they should always strive to do good deeds.

What Is Behind The Success Of Islamic Finance?

There are a number of reasons why Islamic finance has been successful. One is that it adheres to strict ethical principles that appeal to many Muslims. In addition, Islamic finance is seen as a way to promote economic development in Muslim-majority countries.

Another reason for the success of Islamic finance is that it is based on real assets rather than debt. This makes it much less susceptible to the types of financial crises that have plagued the Western world in recent years.

How Does Islamic Finance Work?

Now that we’ve answered the question, “What is shariah law?” let’s take a closer look at how Islamic finance works. As we mentioned before, one of the key principles of sharia law is the prohibition of riba. Riba is the Arabic word for interest, and it refers to any type of financial transaction that involves the charging or receiving of interest. This includes things like credit card debt, personal loans, and mortgages.

The prohibition of riba is based on the belief that money should only be used as a means of exchange and not as a commodity to be bought and sold. This contrasts with the Western financial system based on debt and interest. In the Islamic finance system, transactions are based on real assets such as property or commodities.

Another key principle of Islamic finance is the concept of mudarabah. Mudarabah is an arrangement in which one party provides the capital, and another party manages the investment. The profits are then shared between the two parties according to a predetermined agreement. This system is similar to a partnership but with one key difference: in a mudarabah arrangement, the investor bears no risk if the venture fails.

This is in contrast to the Western system of venture capitalism, in which investors often lose all of their money if a startup fails. The mudarabah system is seen as fairer and more just as it protects investors from losses beyond their control.

Why Is Islamic Finance Growing In popularity?

As we mentioned, Islamic finance is based on ethical principles that appeal to many Muslims. In addition, the growth of Islamic finance is being driven by a number of factors, including:

The Global Financial Crisis:

The global financial crisis of 2008 was a wake-up call for many people. It showed that the Western financial system is far from perfect and that there is a need for alternatives.

The Rise of China and India:

The economic rise of China and India has made them increasingly important players in the global economy. This has created a demand for financial products that are compatible with Islamic values.

The Arab Spring:

The Arab Spring was a series of pro-democratic uprisings that took place in the Middle East and North Africa in 2011. These protests were often directed against corrupt and autocratic regimes, showing a desire for change in the Muslim world.

A number of demographic factors is also driving the growth of Islamic finance. The Muslim population is growing rapidly, and it is estimated that there will be 2.2 billion Muslims in the world by 2030. This growth is creating a demand for financial products that are compatible with Islamic values.

How Can You Benefit From Islamic Finance?

If you’re looking for an ethical and sustainable way to grow your wealth, Islamic finance may be a good option for you. Here are some of the benefits of investing in Islamic finance:

Higher Returns:

Because Islamic finance is based on real assets, it is often less volatile than the stock market. This means you can expect higher returns over the long term.

Lower Risk:

As we mentioned, the mudarabah system protects investors from losses beyond their control. This makes Islamic finance a relatively low-risk investment.

Shariah-Compliant:

If you’re a Muslim, investing in Islamic finance is a way to ensure that your money is being invested in accordance with your religious values.

Support for Economic Development:

By investing in Islamic finance, you can help to support the development of the global Islamic economy.

As you can see, there are many benefits to investing in Islamic finance. If you’re looking for an ethical and sustainable way to grow your wealth, Islamic finance may be the right option for you.

The Future of Shariah-compliant Banking:

The future of Shariah-compliant banking is expected to be strong. The industry is projected to grow at a rate of 10-15% per year over the next decade. This growth will be driven by the increasing demand for Islamic financial products and services, as well as the expansion of Islamic banking into new markets.

Conclusion

Islamic finance is a growing industry, and it’s important to understand the basics of Shariah-compliant investments. We’ve provided an overview of Islamic investment principles and some examples of how you can get started in this exciting field. Contact us today if you want more information or are ready to take the plunge into Islamic finance. We would be happy to help you get started on your journey to success in this rapidly expanding market.

A Guide to Islamic Finance: Understanding Shariah-Compliant Investments

By Blog

Islamic finance refers to how businesses and individuals raise capital in accordance with Shariah, or Islamic law. It also refers to the types of investments that are permissible under this form of law. While the term Islamic finance may conjure up notions of exorbitant interest rates or shirking of taxes and other required payments, many misconceptions exist regarding its practices and rules. Here is an overview to provide elementary information and serve as the basis for further study.

Origins of Islamic Finance

The earliest origins of commercial transactions date back to the time of the Prophet Muhammad in the 7th century. Trade was conducted through barter, or the exchange of goods and services until the concept of currency developed. The first Muslim currency was introduced in AH 77 (696–697 CE), after the Prophet’s death, and was called the dinar. It was made of gold and silver and was equal to 4.3 grams of gold or 23 grams of silver.

According to the Quran, Allah has given humans the power to earn and own property. The act of earning money is considered a gift from God that should be used wisely and in accordance with His laws. Money should not be hoarded; rather, it should circulate for the good of society. Furthermore, money should not be used to exploit others or to gain an unfair advantage.

Islamic laws, or Sharia, were gradually codified beginning in the 8th century. While there are many interpretations of Sharia, the Quran and Sunnah (or traditions) of the Prophet Muhammad are the primary sources. The four Sunni schools of jurisprudence, Hanafi, Maliki, Shafi’i, and Hanbali, as well as the Shia school, all provide rulings on economic transactions

General Rules Of Shariah:

There are two general principles of Sharia that apply to finances and investments: the prohibition of riba, or usury, and the prohibition of gharar, or excessive uncertainty. These concepts will be discussed in more detail later. In addition, Sharia requires that all financial contracts be documented in writing

Prohibition of Riba:

Riba refers to the act of charging interest on a loan. This practice is prohibited in Islam because it is considered to be exploitative. The Quran states, “O you who have believed, do not consume riba, doubled and multiplied, but fear Allah that you may be successful” (Quran 3:130).

Prohibiting riba has led to the development of alternative financial products and services compliant with Sharia. For example, instead of charging interest on a loan, some Islamic banks charge a fee for the service of providing the loan. This fee is typically calculated as a percentage of the principal amount.

Basic Financing Arrangements:

Islamic finance has three basic financing arrangements: murabahah, ijara, and mudarabah.

1) Murabahah:

Murabahah is a type of sale where the seller discloses the cost of the goods being sold and marks up the price to be paid by the buyer. Both parties must agree upon the markup before the transaction takes place. This financing is often used to purchase homes, cars, and other durable goods.

2) Ijara:

Ijara is a form of leasing. The lessee makes periodic payments to the lessor for the use of an asset, such as a car or a piece of equipment. At the end of the lease period, the lessee has the option to purchase the asset or return it to the lessor.

3) Mudarabah:

Mudarabah is a partnership between two parties, where one party provides the capital, and the other party manages the investment. The profit is shared between the two parties according to an agreed-upon ratio, and the loss is borne by the party who provided the capital.

This type of arrangement is often used in venture capital investments.

Shariah-Compliant Investments:

A variety of Shariah-compliant investments are available, including stocks, bonds, and real estate. In order to be considered Sharia-compliant, an investment must meet certain criteria. First, the asset must be permissible under Sharia. This means that the asset cannot be used for activities that are prohibited, such as gambling or alcohol production. Second, the asset must be free of riba. This means that the investment cannot involve interest payments or other forms of financial exploitation. Finally, the asset must be free of gharar. This means there must be no excessive uncertainty or speculation involved in the investment.

Examples of Shariah-Compliant Investments:

One example of a Shariah-compliant investment is an Islamic bond or Sukuk. Sukuk are similar to conventional bonds, but they are structured to avoid the payment of interest. Instead of paying interest, Sukuk holders receive a share of the profits generated by the underlying asset. This makes Sukuk a more attractive investment for those who wish to avoid riba.

Another example of a Shariah-compliant investment is an Islamic mutual fund. These funds invest in a variety of different assets, including stocks, bonds, and real estate. Islamic mutual funds are subject to the same criteria as other Sharia-compliant investments, such as the avoidance of riba and gharar.

Many other Shariah-compliant investment products are available, including Islamic ETFs, indexes, and REITs.

Shariah-compliant Banking:

Shariah-compliant banking is a type of banking that adheres to the principles of Islamic law. This includes the prohibition of riba and the promotion of socially responsible investments. Shariah-compliant banks offer a wide range of products and services, including savings accounts, checking accounts, and investment products.

The Global Islamic Banking Industry

The global Islamic banking industry is currently estimated to be worth $2 trillion. This figure is expected to grow to $3.4 trillion by 2023. The industry is concentrated in the Middle East and Southeast Asia, but there are a growing number of Islamic banks in Europe and a trillion by 2023.

Shariah-compliant Banking in the United States:

There are a number of Islamic banks in the United States, including the American Muslim Bank and the First Islamic Investment Bank. These banks offer a wide range of products and services, including savings accounts, checking accounts, and investment products.

The Future of Shariah-compliant Banking:

The future of Shariah-compliant banking is expected to be strong. The industry is projected to grow at a rate of 10-15% per year over the next decade. This growth will be driven by the increasing demand for Islamic financial products and services, as well as the expansion of Islamic banking into new markets.

Conclusion

Islamic finance is a growing industry, and it’s important to understand the basics of Sharia-compliant investments. We’ve provided an overview of Islamic investment principles and some examples of how you can get started in this exciting field. Contact us today if you want more information or are ready to take the plunge into Islamic finance. We would be happy to help you get started on your journey to success in this rapidly expanding market.

How to Get a Business Loan in Malaysia: The Ultimate Guide

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Malaysia is a country with a well-developed economy, and as such, there are plenty of opportunities for businesses to get funding through loans. However, getting a business loan in Malaysia can be tricky, as there are many different types of loans available, and each has its own set of eligibility requirements. In this ultimate guide, we will walk you through the process of getting a business loan in Malaysia from start to finish.

Steps To Plan Your Business Loan:

Here are the steps you should take in order to plan your business loan:

1) Sort Out Your All Legal Matters:

The first step to getting a business loan in Malaysia is to ensure that all of your legal matters are in order. This includes incorporating your business if you have not already done so. You will also need to have all of the required licenses and permits in place before you can apply for a loan.

2) Create a Detailed Business Plan:

The next step is to create a detailed business plan. This should include information on your business model, your target market, your marketing strategy, and your financial projections. The lender will use your business plan to assess your loan application, so it is important that it is well-crafted.

3) Choose the Right Loan for Your Business:

There are many different types of loans available in Malaysia, so you must choose the right one for your business. The most common type of loan is a term loan, which can be used for a variety of purposes such as working capital, equipment purchases, or property development.

4) Gather the Required Documentation:

Once you have chosen the right loan for your business, you will need to gather the required documentation. This includes financial statements, tax returns, and bank statements. You will also need to provide a business plan and a detailed description of your collateral.

5) Submit Your Loan Application:

The final step is to submit your loan application to the lender. Once your application has been reviewed, the lender will provide you with a loan offer. If you accept the offer, you will be required to sign a loan agreement and make a down payment.

Top 5 Malaysian Government Funding Schemes:

1) Tabung Usahawan Siswazah (TUS):

The Tabung Usahawan Siswazah (TUS) is a financing scheme open to Malaysian citizens pursuing higher education. Under this scheme, students can apply for loans of up to RM5000K at 4% interest per annum to finance their studies.

2) Tekun Nasional:

The Tekun Nasional is a government agency that provides financing to small businesses in Malaysia. The agency offers a variety of financing products, including term loans, working capital loans, and micro loans. Tekun offers RM 10K to 50K loans for small businesses.

3) Rural Economy Funding Scheme (SPED):

The Rural Economy Funding Scheme aims to increase economic opportunities for rural people in Malaysia. It offers loans between RM20k and RM50K that are based on shariah principles, with no interest charged if it’s used within one year or paid back early at just 4%.

4) SME Emergency Fund (SMEEF):

The SMEEF is a financing facility that is open to small and medium enterprises (SMEs) in Malaysia that have been affected by the COVID-19 pandemic. Under this scheme, businesses can apply for loans of up to RM100K at 0% interest.

5) Soft Loan for SMEs (SLSME):

The Soft Loan for SMEs (SLSME) is a financing scheme that is open to Malaysian SMEs. Under this scheme, businesses can apply for loans of up to RM5 million at 4% interest per annum. The loan tenure is up to 10 years, and no collateral is required.

Conclusion

So, you’ve decided to take the plunge and start your own business. Congratulations! A loan can help get your business off the ground by providing you with the funds you need to cover startup costs. We hope this guide has helped explain how to get a business loan in Malaysia. Apply today and get started on your journey to success!

What is Asset-Based Lending and How Does it Work?

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If you own a business or are looking to start one, you may have wondered if asset-based lending could help you secure the funding you need. Asset-based lending, or loan-to-value (LTV) lending, allows businesses to borrow against their assets. Unlike traditional forms of financing that rely on your business’s income statement, asset-based lending requires little more than the value of your equipment and vehicles to secure an offer. But what does this mean in practice? How do businesses benefit from this type of funding?

In this article, we’ll explore asset-based lending in more depth. We’ll cover what it is, how it works, and some of the key benefits it can offer businesses. By the end, you should understand whether this type of funding could be right for your business.

What Is Asset-Based Lending?

Asset-based lending is a type of short-term financing that allows businesses to borrow against their assets. The loan amount is based on a percentage of the value of the assets used as collateral. This can include equipment, vehicles, real estate, invoices, and inventory.

Asset-based lending is typically used by businesses that need quick access to capital and cannot qualify for traditional financing forms. This type of funding can be a lifeline for businesses that are struggling to make ends meet or looking to take advantage of opportunities as they arise.

How Does Asset-Based Lending Work?

Asset-based lending works by using the value of your assets as collateral for a loan. The loan amount is based on a percentage of the value of the assets used as collateral. The lender will assess the value of your assets and offer you a loan based on that value. You can then use the funds from the loan for any business purpose.

The repayment terms for asset-based loans are typically shorter than those for traditional loans, and the interest rates are higher. However, this type of financing can be a good option for businesses that need quick access to capital and are unable to qualify for traditional loans.

Example:

Let’s say you own a small business that manufactures and sells products. You have RM100,000 in inventory and RM50,000 in equipment. You need RM10,000 to purchase raw materials and pay your employees. However, your bank denies your business loan request because your business is not generating enough income to meet their lending criteria.

In this situation, asset-based lending could be a good option for you. The lender would assess the value of your inventory and equipment and offer you a loan based on that value. You could then use the funds from the loan to purchase raw materials and pay your employees.

Key Benefits of Asset-Based Lending

Asset-based lending can offer businesses a number of key benefits, including:

1) Quick Access To Capital:

One of the biggest benefits of asset-based lending is that it provides businesses with quick access to capital. If you need funding for a short-term opportunity or to cover unexpected expenses, this type of financing can be a lifeline.

2) No Income Statement Required:

Another benefit of asset-based lending is that businesses don’t need to have a strong income statement to qualify. This type of financing is based on the value of your assets, not your business’s ability to generate income. This makes it a good option for businesses that are struggling to make ends meet or are in the early stages of development.

3) Flexible Repayment Terms:

Asset-based loans also offer flexible repayment terms. This can be a big advantage for businesses that need quick access to capital but may not be able to repay the loan in full within a short period.

4) Lower Interest Rates:

Asset-based loans typically come with lower interest rates than traditional loans. This is because the value of your assets secures the loan.

5) Higher Loan Amounts:

Higher loan amounts are another advantage of asset-based lending. This type of financing allows businesses to borrow against their assets, so the loan amount is based on the value of the collateral. This can be a big benefit for businesses that need a large sum of money.

Conclusion

Asset-based lending is a great way to get the money you need for your business. It can be used for a variety of purposes, such as expanding operations, buying new equipment or inventory, and even refinancing debt. If you’re interested in learning more about asset-based lending or want to apply for a property loan, apply for a business loan today!

Advantages of Taking Islamic Property Financing

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There are many different types of property financing available to business owners and homeowners. One option that is becoming increasingly popular is Islamic property financing. This type of financing is based on the principles of Shariah law, and it has a number of advantages over traditional methods.

 In 1983, an act was passed that allowed for Islamic finance in Malaysia, with Bank Islam Malaysia coming into existence at about the same time as well. Today, more and more people are choosing to take out Islamic mortgages instead of the traditional kind.

But why is this? What are the advantages of taking Islamic property financing? In this blog post, we will discuss the benefits of taking Islamic property financing.

How Does Islamic Property Financing Work?

Before we get into the advantages of Islamic property financing, it is important to understand how it works. In traditional mortgages, the lender loans the borrower a sum of money and charges interest on that loan.

With an Islamic mortgage, the bank does not charge interest. Instead, they enter into a partnership with the borrower where they share in the profits or losses of the property. This means that if the property increases in value, the bank will make a profit. If the property decreases in value, the bank will lose money.

What Does Mean Shariah Complaint Financing?

Shariah is Islamic law, and Shariah compliant financing refers to any financial activity permissible under Shariah law. This includes things like banking, insurance, and investing. One of the main principles of Shariah law is the prohibition of riba, which is often translated as “usury” or “interest.” This means that Islamic financial institutions are not allowed to charge interest on loans.

Advantages of Taking Islamic Property Financing:

Some of the advantages of Islamic financing include:

1) Lower Interest Rates:

One of the biggest advantages of Islamic financing is that it typically has lower interest rates than traditional methods. This is because Shariah law prohibits charging interest, so lenders are not allowed to charge excessive fees.

2) Shariah Compliance:

Shariah compliance means that the financing is in line with the principles of Islam. This is important to many Muslims who want to ensure that their finances follow their religious beliefs.

3) Base Financing Rate (BFR):

The Base Financing Rate is the minimum interest rate a bank can charge for Islamic financing products. Bank Negara Malaysia sets the BFR, which currently stands at four percent.

 Furthermore, banks are only allowed to charge a maximum of six percent above the BFR. This is lower than the ceiling rate for conventional loans, which is currently at 18 percent.

4) Penalty Fee For Property Disposal:

If you want to sell your property before the end of the financing tenure, you will have to pay a penalty fee. This is because the bank will not be able to make back the money they invested in your property.

5) Cost of stamp duty lower by 20%:

The Malaysian government has implemented a number of incentives to encourage people to take out Islamic mortgages. One of these is a 20 percent reduction in the cost of stamp duty. Additionally, the government has also waived the Real Property Gains Tax for Islamic home financing.

As you can see, there are a number of advantages to taking out Islamic property financing. If you are thinking about getting a mortgage, be sure to consider this option. You may find that it is the best choice for your needs.

Conclusion

Islamic property financing has many advantages over other types of loans. If you are in the market for a new home or need to finance an investment property, it is worth your time to explore all of your options, including Islamic property financing. With its low-interest rates and flexible terms, an Islamic loan could be the perfect choice for you. Contact us today to learn more about how Islamic financing can work for you!

Invest In Gold

Is Investing in Gold in Malaysia Worth the Price?

By Blog

With the recent price hike in gold, many investors are rushing to cash in on this opportunity. Malaysia has seen an increase in gold scams that saw individual investors put down as much as RM200,000 for non-existent stocks. Klang Valley residents alone have lost billions to these schemes!

Gold bars are a good investment if you have security measures in mind. Otherwise, there’s always the risk of theft or scams that could steal your money from physical form factors like coins and bars. So, before you consider doing so, it’s important to understand that purchasing gold can be risky if you don’t know what you’re doing. To find out whether or not it’s worth the price, let’s take a look at some of the factors to consider when making your choice.

Reasons Why People Invest In Gold:

The first thing you need to do is to understand the reasons why people invest in gold.

1) Hedge Against Inflation:

The most common reason is that gold is a hedge against inflation. When the cost of living goes up, the prices of gold usually follow suit. This means that if you have money saved up in gold, it will be worth more in the future when the prices of goods and services increase.

2) Form Of Insurance

Another reason why people invest in gold is as a form of insurance. In the event of an economic collapse or a natural disaster, gold can be used as a form of currency to buy food and other necessities. This is because gold is universally accepted as a form of payment, regardless of the state of the economy.

3) Status Symbol

Lastly, some people invest in gold because it is a status symbol. Gold has been used as a form of currency and a store of value for centuries, and its status continues to this day. For many people, owning gold is a sign of wealth and success.

Now that we’ve looked at why people invest in gold let’s look at whether or not it’s a good investment in Malaysia.

Is Gold a Good Investment In Malaysia?

As we mentioned earlier, one of the reasons why people invest in gold is as a hedge against inflation. Inflation in Malaysia has been on the rise in recent years and is expected to continue to do so in the future. This makes gold a good investment in Malaysia, as it is likely to increase in value over time.

Another reason to invest in gold is the current state of the economy. The Malaysian economy has been through some tough times recently and is only now recovering. However, there is still a lot of uncertainty about the future, making gold a safe investment.

Lastly, gold is a good investment in Malaysia because it is relatively easy to buy and sell. There are many dealers and outlets that sell gold, so you should have no trouble finding a buyer when you want to sell.

However, it’s important to remember that investing in gold-related investments is a high-risk game, especially if you bank with the PIDM (Perbadanan Insurans Deposit Malaysia). The insurance agency will refuse to cover any losses incurred from bankruptcy or liquidation of your assets at any time!

So, Is Investing in Gold in Malaysia Worth the Price?

Now that we’ve looked at some of the reasons why people invest in gold and the risks involved, it’s up to you to decide whether or not it’s worth the price. If you’re a risk-averse investor, then gold may not be the right choice for you. However, if you’re willing to take on some risk, then gold could be a good investment. Ultimately, the decision is up to you. May consult our Consultant to make the Right Choice!

How to Get a Commercial Property Loan: Everything You Need to Know

By Blog

Commercial property loans can be a great way for business owners to get the money they need to expand their businesses. However, knowing where to start when trying to get a commercial property loan can be difficult.

This blog post will discuss everything you need to know about commercial property loans! We will talk about what commercial property loans are, how to qualify for one, and the different types of commercial property loans available.

We will also provide tips for getting the best interest rate on your commercial property loan.

So, if you’re interested in learning more about commercial property loans, keep reading!

How To Qualify For A Commercial Property Loan?

To qualify for a commercial property loan, you will need to have good credit and a strong business plan. You will also need to put down a down payment of 25-30% of the purchase price. The down payment can be paid in cash or through equity in the property.

What Are The Different Types Of Commercial Property Loans?

There are several different types of commercial property loans available, including:

SBA 504 Loan:

The Small Business Administration (SBA) 504 loan is a long-term, fixed-rate loan that can be used to purchase or finance commercial real estate construction.

SBA Sevena Loan:

The SBA Sevena loan is a shorter-term, variable-rate loan that can be used to finance the purchase of an existing commercial property. However, the interest rate on this loan will adjust every six months.

Conventional Loan:

A conventional loan is a traditional bank loan that can be used to purchase or finance commercial real estate construction. Furthermore, commercial real estate loans can be either recourse or non-recourse.

Recourse loans allow the lender to go after the borrower’s personal assets if the loan is not paid back, while non-recourse loans do not allow this.

Hard Money Loan:

A hard money loan is a short-term, high-interest loan that is typically used to finance the purchase of the commercial real estate. Hard money loans are often used by investors who are flipping properties or who do not have the time to go through a traditional lending process.

How To Obtain A Commercial Loan?

The best way to get a commercial loan is to work with a commercial mortgage broker. Commercial mortgage brokers are experts in the field and can help you find the best loan for your needs. Furthermore, commercial mortgage brokers will typically have access to a variety of lenders and can help you get the best interest rate on your commercial loan.

When applying for a commercial loan, you will need to provide the following documentation:

Personal financial statement:

A personal financial statement is a document that outlines your assets, liabilities, and net worth. This document is used to show the lender that you have the ability to repay the loan.

Business tax returns:

Business tax returns are used to show the lender that your business is profitable and has the ability to repay the loan.

Commercial lease:

A commercial lease is a document that outlines the terms of your lease agreement. This document is used to show the lender that you have a long-term plan for your business.

Personal guarantee:

A personal guaranty is a document that indicates that you are personally responsible for the repayment of the loan. This document shows the lender that you are willing to put your personal assets at risk to obtain the loan.

Appraisal:

An appraisal is a document that outlines the value of a commercial property. This document is used to show the lender that the property is worth the purchase price and can be used as collateral for the loan.

Business plan:

A business plan is a document that outlines your business goals and how you plan on achieving them. This document shows the lender that you have a well-thought-out plan for your business and that you are serious about making it a success.

Tips For Getting The Best Interest Rate On Your Commercial Property Loan:

  1. Shop around: The best way to get the best interest rate is to shop around and compare rates from a variety of lenders.

  2. Ask for a break on points: You can ask the lender for a break on points if you are willing to pay a higher interest rate.

  3. Make a large down payment: A large down payment will show the lender that you are serious about repaying the loan and can help you get a lower interest rate.

  4. Have a strong credit score: A strong credit score will show the lender that you are a low-risk borrower and can help you get a lower interest rate.

  5. Offer collateral: Offering collateral, such as commercial real estate can help you get a lower interest rate.

  6. Get a cosigner: A cosigner is an individual who agrees to be responsible for the repayment of the loan if you are unable to do so. Having a cosigner can help you get a lower interest rate.

  7. Ask for a longer loan term: A longer loan term will lower your monthly payments and can help you get a lower interest rate.

  8. Refinance: If you have already obtained a commercial loan, you may be able to refinance it at a lower interest rate.

Conclusion

You now have a better understanding of what to expect when you are applying for a commercial property loan. The process can be daunting, but with the help of a knowledgeable and experienced Consultant, it can be much easier.

Follow these steps to get started, and reach out to us if you have any questions along the way. We want to see your business succeed and will do everything we can to make sure that you have the financing you need to make your dreams a reality.