SME Business Loan Frequently Asked Questions (FAQ)

1. My company is newly established. Am I eligible to apply for a SME business loan?

Most banks require a company at least two (2) years operations, before it qualifies for SME business loan.

For new business operations more than 1 year, it is advisable to consider Madani Micro Loan schemes, those supported by the government, to meet initial working capital requirements.

2. My company does not own any collateral. Can I still apply for a business loan?

Yes. Certain government-guaranteed loan schemes do not require any collateral. However, applicants must meet other eligibility criteria, including company annual revenue and satisfactory financial standing.

3. What is the typical interest rate for SME business loans?

Conventional SME loans usually carry interest rates between 5% and 9% p.a.

In contrast, government-guaranteed loans scheme  (GGSM 2)  may offer lowest rate, typically starting from 1.99% p.a., depending on the lender and facility type.

4. What documents are required when applying for a business loan?

• Latest 6 months company bank statements
• Latest 2 years audited report
• Identification documents of company directors
• Tenancy agreement or recent utility bills for business premises
• Company SSM

5. How long does it take to receive a loan approval?
Banks typically provide a loan approval decision within 30 working days of submission of complete documentation. Upon approval, fund disbursement may take approximately 1 to 3 weeks, subject to internal processing.

6. Can I apply for multiple loans simultaneously?

No. Submitting multiple loan applications within a short period may raise concerns among banks regarding the company’s financial stability and could lead to rejections. 

7. My company already has an existing business loan. Can I still apply for other new business loans?

Approval for an additional loan is depend on the company’s cash flow capacity, debt servicing ratio, and overall financial health. If the business demonstrates sufficient cash flow to support new debt , further financing may be considered.

8. How much financing can my company obtain?

As a general guideline, most business loans have a maximum limit of 50% of the company’s annual turnover. However, the final approved amount is subject to detailed financial evaluation, particularly of the audit report.

9. Can I apply a business loan if my company currently has late payments?

No. It is recommended that any outstanding arrears be fully settled before applying for a new loan application. 

Additionally, a waiting period of approximately two months should be observed to ensure that all new credit records have been updated.

10. If my recent loan application was rejected, how soon can I apply again?

If the first loan application was recently declined, it is essential to know the reasons for rejection before reapplying. 

As a general rule, if a loan application is rejected twice, it becomes more difficult to submit another application within the following six months.

Loan applications can be easier with the right way and right preparation.

Let us assist you—Whatsapp or contact us now at 0167268033 for a complimentary assessment tailored to your business.