SOFT LOAN SCHEME FOR SMALL AND MEDIUM ENTERPRISES (SLSME)

The SLSME was introduced in December 2001 to promote the development of small and medium enterprises. Existing as well as new start-up companies are eligible to apply for fixed assets and working capital financing under the SLSME.

The fund for the Scheme is channelled from the Government of Malaysia through the Small and Medium Industries Development Corporation (SMIDEC), and the Scheme is implemented by MIDF.

Eligibility Criteria and Main Features

1. Eligibility:

• SMEs incorporated under the Companies Act 1965 or Registration of Business Ordinance 1956;
• Subsidiaries of public-listed companies with shareholding not exceeding 20%;
• At least 60% equity held by Malaysians; and,
• Possess a valid premises licence.

2. Sectors:

• Manufacturing
• Manufacturing – related services
• Services (excluding insurance and financial services)

3. Financing Amount:

• Minimum: RM50,000
• Maximum: RM3 million

4. Eligible Items:

• Fixed assets and working capital financing;
• Costs incurred for initial store renovation and upgrade of store display for retail trade; and,
• Working capital for companies with confirmed contracts awarded by GLCs, MNCs and the Government including its agencies.

5. Percentage Financing

• Fixed Assets
• Up to 90% of the cost for new assets; and,
• Up to 65% for used/reconditioned machinery/equipment which shall not be more than 5 years old.
• Working Capital
• Up to 90% for Sales Revolving Credit.
• Up to 100% for Purchase Revolving Credit.

6. Repayment:

• Land and Building - up to 15 years including grace period of up to 2 years.
• Machinery and Equipment - up to 6 years including grace period of up to 1 year.
• IT Equipment - Up to 4 years including grace period of up to 1 year.
• Revolving Working Capital and Factoring - subject to annual review.

7. Interest Rate:

• 2 % per annum on yearly rest.