3rd March 2022 - 5 min read
For every business owner, there will come a time when you would need extra cash, whether it’s to sustain your business or to expand it. Needless to say, finding the right loan is crucial for your business. But with so many financing products in the market, which one suits your needs?
Before applying for a loan, you can look into the different types of financing in the market. Each type of financing serves a certain purpose and possesses different requirements. You can then match your needs and capabilities to the right financing for your business.
In general, there are three types of business financing available in the market that each serves its own unique purpose.
Every business owner has experienced his or her fair share of challenges, including unexpected ones such as stock damage due to floods. In certain industries like retail, it is also common to experience sales cycle fluctuations where business might pick up during certain months and flatten during others. In such circumstances, you need to ensure there is sufficient capital to tide things over while making recovery.
A common available fund to support immediate needs is working capital financing. There are various product packages for Micro, Small, And Medium Enterprise (MSMEs) based on their cash flow and trade cycle. In fact, if you are an existing Maybank customer, you may be able to get up to RM250,000 in cash within 10 minutes after acceptance via Maybank SME Digital Financing/-i. It is open to MSMEs and even start-ups that have been in business for a minimum of one year.
For SMEs that require a higher amount of working capital but do not have collateral to pledge, there are other options based on your business requirements. MSMEs may opt for any of the packages that Maybank is offering in partnership with the Credit Guarantee Corporation Malaysia Berhad (CGC) and Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) for a working capital line from RM250,000 up to RM1,500,000 in the form of an overdraft, term loan, or trade facility.
Also, for exporters that obtain financing under the SJPP, you can also enjoy a 2% rebate on interests or profit rates exclusively for SMEs that have 50% of their sales or turnover contributed from export trade.
Last but not least, business owners who have collateral may also opt for a re-mortgage plan via Maybank SME Property & Business Financing/-i for additional working capital. This package offers a margin of financing of up to 120%, in which the working capital portion can go as high as 30% of the property value.
At some point where your business is scaling up, you will need financing that can help you expand with confidence.
For business owners who are looking to acquire assets such as shop lots and factory buildings as part of their expansion plans, you can consider Maybank SME Property & Business Financing/-i , an asset-backed financing where you can get financing for your property as well as extra working capital, be it in the form of a term loan, overdraft, or tradelines. SMEs can apply for financing either with Margin of Advance (MOA) or financing up to 120% which includes your insurance and legal fees as a part of the financing amount. You may also enjoy MOA of up to 150% on a campaign basis, depending on your eligibility.
Importers and exporters frequently utilise trade finance as a means that not only makes business transactions possible, but also easier. MSMEs that are in the export and import business can consider trade financing to ensure fewer delays in payments and shipments.
This way, both importers and exporters will be able to run their businesses and plan their cash flow more efficiently. Maybank Trade Financing offers a myriad of solutions including invoice financing, bankers’ acceptance, bank guarantee, and many others, which can be tailored to your business needs. For instance, invoice financing is an alternative working capital facility where it can help SMEs to gain quick access to financing amounts that have been invoiced, which is different from the regular term loan, providing more flexibility. Moreover, with a wide network of over 2,300 correspondent global banks, Maybank can provide SMEs with better access to fulfilling their international transaction needs.
With so many financing products in the market, it can get confusing when trying to find one that fulfils your needs. In this article, we’ve outlined three types of financing that address the most common funding needs of a business owner. If you’re looking to get financing, you can consider Maybank’s various packages for extra working capital that do not require collateral, provide asset-backed financing, and financing for trade of goods and services.
Note: The contents of this article do not constitute financial advice. Readers should conduct their own research before making a financial decision.
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