However, to get the loan application to approve by the lender are always the most challenging part for SME and business owners.
Banks in Malaysia require business loan applicants to prove a minimum of two years of operation (as per SSM registration) and have submitted income tax returns for the same duration. Failure to meet these criteria will result in an automatic loan rejection.
Your business loan application in Malaysia might have been rejected due to the inability to provide crucial financial documents such as an audit report, income tax returns, and the company's 6-month bank statement. These documents are essential for proving your company's financial health and salary disbursements, which are key factors in a bank's decision-making process.
The bank will have access to your all track records, this includes any late or overdue transactions; and whether you made minimum or maximum payments. It also indicates the remaining monthly balance. From here, the banks will assess your credit risk and understand whether you are a trustworthy borrower.
Some of us may not have credit cards and other financial commitments because we are too worried to spend. While this might be a good thing, but it does not help when it comes to the loan application. This is because the bank will not have enough information to make a decision, insufficient information to decide whether you are a good paymaster or vice versa.
Startups often struggle to secure SME loans in Malaysia due to the minimum requirement of two years of operation and two years' worth of income tax submissions.
As a result, we recommend startups consider alternative funding options, such as obtaining a personal loan to gather initial capital.
Here’s what you can do to be a successful SME loan borrower:
You should be well-versed in your business’s existing debt and credit scores, as they significantly impact the loan approval process.
Doing so generates higher returns and establishes a solid financial track record or credit history.
Therefore, to streamline the process, hiring a professional loan agent can help you obtain customised loan offers tailored to your specific needs.
While having a high credit score can enhance your chances of securing a new business loan, it’s not an absolute requirement.
If your business lacks a credit score, your personal credit history can be used as an alternative as well.
