Applying For SME Loans In Malaysia? Prep Yourself With These Questions

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Every business owners dream to get working capital to expand their business or sustaining the current operation especially during a hard time such as MCO. Financial institutions have a strict requirement when applying for SME loan in Malaysia and with COVID-19 still lingers in 2021, it going to be even tougher. Not only that, with good credit history and financial positioning does not guarantee you a security of the funds you need if you’re not well prepared in answering some questions from the lender.

These questions are the “make it or break it” situation when applying for SME loans. The lenders will be able to understand your company’s current financial situation from these questions and creating a mutual relationship with each other to avoid scepticism.

Here are some of the questions when applying for SME loan in Malaysia so you can answer it confidently!

1. Why do you need working capital?

Oftentimes, this is the first and most important question that every lender will always ask especially dealing with SME loans in Malaysia. Financial institutions need to know the purpose of your working capital as the fund is large. A working capital leads to sustaining and expanding the business so a business plan is crucial when pitching to the lender. This allows more valid and concrete reasoning to increase the trust between each other without any “fishy” matter.

2. How much capital amount do you need?

The amount of working capital will contribute significantly to the business operation. Hence, to expand or sustain the current business, the banks or lenders must know the exact amount of expansion or equipment. The reason being is that if you need working capital, they must know how will you spend accordingly. With the SME loan at stake, it’s better for the borrower to be transparent and avoid hidden agenda.

3. What is your financial status?

Despite having a good financial positioning and healthy credit score, financial institutions will ask for the company’s financial documents such as audited reports, bank statements and more to justify your financial status.

4. Do you have other obligations?

From the current financial documents, the financial institutions will be able to determine your current obligation so it is better to stay truthful when applying for SME loans in Malaysia. These obligations will be featured on your credit histories such as CTOS or CCRIS report so repayment history matters. With this, the lender should know are you an on-time frequent repayer.

5. Which type of financing would be suitable?

Depending on the nature of your business, there are plenty of options available in the market such as SME loan, overdraft, invoice financing, crowdfunding and so on. Once you know your business plan with the proposed working capital, the business owner will be able to determine the right type of financing with justification. This allows the lender to know that you’re very well prepared and may even suggest the right financing or approving your financing proposal

6. What’s your business plan?

Your business plan is the “make it or break it” proposal when applying for SME loans in Malaysia. Within this business plan, you should include the future projection of the company, current financial statements, future products, market analysis, data analytics, prospected revenue and so much on. This preparation will make your lender understand fully your goals and the chances of approval would be much higher.

7. Do you have all the documents?

This is a no brainer to many business owners but occasionally some might forget one or two. Before heading to apply for SME loans, start listing down and prep some of documents needed when asked the loan officer at the start.

This ensures to avoid a longer process as many business owners are trying to apply but the lack of manpower within the financial institutions would hinder your urgency to get the SME loan.

Still uncertain with your current financial positioning?

At Nexus Capital, we’re equipped in-house crediting system and panel of financial networks to help with applying for SME loans.

Click here to contact us!


Sam Wong - SME loan Consultant

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