Government Grants for SMEs in Malaysia

“Become your own boss!” This always sounds like an attractive proposition, but it’s easier said than done, especially from a financial perspective. Capital is the most important thing when it comes to setting up a business, no matter big or small. 

Fortunately, there are some very helpful and accessible grants available for aspiring entrepreneurs. Your dream of becoming the owner of an SME is closer than you realise, just look into some of these grants and see if you qualify. 

Soft Loans for SMEs (SLSME)

SLSME allows access to fund amounts between RM 50,000 to RM 5 million. The grant primarily focuses on the service industry, (except insurance and financial services) manufacturing, and manufacturing-related services. 

To qualify, the SME must meet the following requirements: –

• SME must be incorporated under the Companies Act 1965.
• SME must be incorporated under Registration of Business Ordinance 1956.
• Malaysians hold at least 60% of equity.
• Owns a valid premise license. 
• Shares do not exceed 20% held by public-listed companies. Only if applicable. 

Soft Loans Scheme for Services Sector (SLSSS)

Similar to SLSME, SLSSS provides financial aid to start-ups and SMEs in the services sector. Essentially, it functions as a financial loan for capital expenditure or working capital, with an interest rate of 4% per annum.

The maximum amount an SME can apply for from this programme is RM 5 million.

Bumiputera Enterprise Enhancement Programme (BEEP)

BEEP is a specialised SME funding grant aiming to develop strong Bumiputera SMEs. Their strategy is to strengthen the core business and capacity, in turn increasing productivity and offering solutions.

BEEP offers the following financing aid to Bumiputera SMEs: –

1.     Training
2.     Packaging and labelling
3.     Certification and Quality Management System
4.     Innovation
5.     Advertising, Promotion and Branding

SMEs that fall under this category can apply for the grant via SME Corporation Malaysia.

The eligibility criteria are as follows: –

• Business has to be registered under SSM / Professional Bodies / Authorities or District Offices in Sabah and Sarawak.
• Must fulfill the definition of SME in terms of annual sales turnover and scope.
• 60% of equity must be bumiputera-owned.
• Business must own a valid business premise license.
• There must be no conflict of interest with the supplier.
• Business must have begun operation for at least 6 months. 
• Business must have a SCORE / M-CORE assessment.

SME Emergency Funds (SMEEF)

SMEEF isn’t really a grant, but an emergency loan to help businesses affected by natural disasters. SME owners can apply for a soft loan if their business premise or equipment is damaged or destroyed in floods, storms, droughts, or landslides. 

As a soft loan, the financing amount ranges from RM 50,000 to RM 100,000. It is restricted to use for replacement of equipment, machinery, raw materials and consumables, or to repair damages in the business premise. 

To qualify, the business/SME must: –

• Be registered with SSM under Companies Act 1960 or Business Registration Act 1956.
• Have at least 60% of equity funds based in Malaysia.
• Own a valid business premise.
• Have operated the business in disaster areas (declared by the National Security Council or other district offices.)
• Provide evidence that the business was affected by the natural disaster.
• Provide a letter issued by District Officers.
• Obtain a verification report from SME Corp Malaysia.

TEKUN and Usahawan Nasional Berhad (PUNB)

Through TEKUN Nasional and Perbadanan Usahawan Nasional Berhad (PUNB,) SMEs can get a share of RM 510 million provided to help during MCO. 

TEKUN is a financial services agency for micro and small entrepreneurs under the Ministry of Agriculture & Agro-based Industry.

PUNB was established to enhance the participation and involvement of Bumiputera in entrepreneurship in the country.

High Tech Facility – National Investment Aspirations (HTF-NIA) 

HTF-NIA of Bank Negara Malaysia is part of the government’s effort to provide additional assistance for SMEs affected by COVID-19. SMEs can obtain financing of up to RM 5 million for their operations.

• Introduced as a part of 2021’s national budget, HTF-NIA is part of the government’s effort to assist SMEs affected by COVID-19.
• SMEs can obtain financing up to RM1 million for working capital purposes; Up to RM5 million to finance capital expenditure; or A combination of working capital and capital expenditure up to RM5 million, for a tenure of up to 7 years.
• The facility is offered at a financing rate of up to 3.5 % p.a. for financing without guarantee, or up to 5% p.a. inclusive of guarantee fee. 
• It is available now until 31 December 2021, or until the facility is fully utilised (whichever is earlier.)
• Apply directly with participating financial institutions, which comprise commercial banks, Islamic banks and development financial institutions regulated by BNM through their websites or by visiting their branches.

Dana Penjana Nasional

Dana Penjana Nasional is a RM 600 million investment fund by the Government of Malaysia for venture capital firms to invest in start-ups. 

This amount will be matched on a 1:1 basis by foreign investment institutions to attract investors.

With the balance of RM600 million to be matched by investors, an allocation of RM 1.2 billion will be made available to help enhance the digitalisation and automation of Malaysian businesses, especially SME, and revitalise the Malaysian economy.