Government Grants

SMEs are the lifeline of all the world economies, and Malaysia is no different. Despite the fact that SMEs make the majority of the country’s businesses, little effort has been directed towards creating a conducive business environment for small business owners and start ups. The biggest problem facing SMEs and start up businesses is lack of finances to run or grow the business. Almost every one of the few financial institutions providing Finance to SMEs have stringent borrowing terms that the ordinary small business owner cannot meet and they end up being locked out of acquiring the dire financial help their businesses urgently require. Seeing as private financial institutions are not of great help, all eyes have turned to the government of Malaysia to come to the aid of SMEs by giving out government grant.

The government, realizing the great potential of SMEs has come up with several support mechanisms like low taxes, offering training and consultancy services to SME owners and of course providing loans and grants. Government grants and loans are the most preferred sources of business Finance because of the attractive payment terms. We all know that the government is a nonprofit organization, in fact the largest one, and its main objective of providing these loans or any other services is not for profit but for the benefit of its citizens. With that being said, government funding is easier to apply for and to obtain compared with ordinary financial institutions.

Government funds are split in several categories and meant for different individual and businesses. The grace period for the loans is up to 48 months to give the business time to break even and start making a profit. The different loan programs include the Young Entrepreneurs Fund, the Graduate Entrepreneurs Fund exclusively meant for enterprising degree holders and the Fund For small and Medium Industries.