MIDF Soft Loan Schemes

The 2(two) Soft Loan Schemes that Malaysia Industrial Development Finance Berhad (MIDF) are introducing here have been specifically designed to meet the financing requirements of companies and enterprises:

• The Soft Loan Scheme For Small and Medium Enterprises (SLSME)
  • To assist SMEs in financing acquisitions of fixed assets i.e lands, factory buildings, shop-lots, machinery/equipment and working capital requirements. SLSME is specifically designed to meet the financing requirements of SMEs in establishing start-up businesses or in expanding/upgrading businesses and also in enhancing competitiveness to face challenges and to capitalise on opportunities.

• The Soft Loan Scheme For Automation and Modernisation (SLSAM)
  • To aasist in the modernisation and automation of manufacturing processes and the upgrading of production capability and capacity so as to minimise dependence on labour-intensive activities and foreign labour, and to diversify into higher value-added activities as well as assists in the rationalisation and streamlining of operations through mergers and acquisitions.

SOFT LOAN SCHEME FOR SMALL AND MEDIUM ENTERPRISES (SLSME)

Eligibility Criteria and Main Features

1. Eligibility:

• SMEs incorporated under the Companies Act 1965 or Registration of Business Ordinance 1956;
• at least 60% equity held by Malaysians;
• possesses a valid premises licence ; and,
• SMEs with shareholdings not exceeding 20% held by public-listed companies (only if applicable).

2. Sectors:

• Manufacturing.
• Manufacturing-related services.
• Services (excluding insurance and financial services).

3. Financing Amount:

• Minimum: RM50,000.
• Maximum: RM3 million.
• IT Software / Hardware – Minimum : RM 50,000 Maximum : RM 500,000

4. Items Eligible For Financing:

• Industrial / Commercial land and factory / business premises construction, ready-built factories / business premises, plant, machinery / equipment and IT software / hardware.
• Costs incurred for initial store renovation and upgrade of store display for retail trade.
• Working capital.

5. Percentage Financing:
Fixed Assets / IT Software / Hardware

• Up to 90% of the cost of new assets.
• Up to 65% for used / reconditioned machinery/equipment which are not more than 5 years old.

Working Capital

• Up to 100% for Purchase Revolving Credit.
• Up to 80% for Sales Revolving Credit.

6. Repayment:
Fixed Assets / IT Software / Hardware

• Land & building – up to 15 years including grace period of up to 2 years.
• Plant & machinery / equipment – up to 6 years including grace period of up to 1 year.
• IT software / hardware – up to 4 years including grace period of up to 1 year.

Working Capital

• Purchase Revolving Credit & Sales Revolving Credit – up to 150 days for each drawdown including an option to rollover for a period not exceeding 60 days for eligible borrowers.

7. Interest / Profit Rate:

• 4% per annum on yearly rest.

SOFT LOAN SCHEME FOR AUTOMATION AND MODERNIZATION (SLSAM)

Eligibility Criteria and Main Features

1. Eligibility:

Companies incorporated under the Companies Act 1965:

• with at least 60% equity held by Malaysians;
• possesses a valid business licence; and,
• in operation for at least 2 years.

2. Sectors:

• Manufacturing Sector.

3. Financing Amount:

• Minimum: RM100,000.
• Maximum: RM5 million per application.

Priority will be given to first-time applications.

4. Items Eligible For Financing:

Automation *

Financing for:

• purchase of new or reconditioned automation-related machinery and equipment. **
• costs related to the installation, commissioning and related training as well as maintenance of the machinery and equipment for investment in automation.
• purchase of software and computer peripherals related to the development of the automation system.

* The automation must result in a reduced number of foreign workers employed.

** The age of reconditioned machinery and equipment shall not be more than 5 years old.

5. Percentage Financing:

• Up to 85% for new machinery and equipment.
• Up to 60% for reconditioned machinery and equipment.

6. Repayment:

• 5 to 7 years including grace period of up to 1 year.

7. Interest / Profit Rate:

• 4% per annum on yearly rest (SMEs).
• 5% per annum on yearly rest. (Non-SMEs).

Applications received for financing under the above soft loan schemes are required to meet the stipulated eligibility criteria of the Schemes and subject to consideration of approval by MIDF.

If interest to take advantage of any of the above Soft Loan Schemes, kindly email MIDF at inquiry-feedback@midf.com.my or contact their Sales Department office on Level 15, Menara MIDF, 82, Jalan Raja Chulan, 50200 Kuala Lumpur at telephone no. 03-21738 888 or our Regional Office nearest to you – Northern Region (tel. no. 04-2298 434), Southern Region (tel. no. 07-2232 727), Eastern Region (tel. no. 09-7483 546), Sabah Office (tel. no. 088-211633) and Sarawak Office (tel. no. 082-254 533).

Source: Malaysia Industrial Development Finance Berhad