Wednesday, December 6, 2023

6 Myths & Facts About Government Loan Malaysia

Money6 Myths & Facts About Government Loan Malaysia

Are you a small business owner trying to navigate the maze of government loans in Malaysia? You’re not alone! It can be overwhelming to sort through all the information out there and separate the myths from the facts. But don’t worry, we’re here to help. In this blog post, we’ll debunk some of the most common misconceptions about government loans and provide you with some helpful and accurate information.

Whether you’re looking for a loan to help you get through a rough patch or to fund your next big expansion, we’ve got you covered. Let us help you sort through the facts and fiction of government loans.

Myth: Businesses need to give up more collateral

Fact: Many business owners are put off from applying for bank loans because they need more collateral to put up for the application. However, most government loan schemes don’t require collateral at all.

This is especially true for government loans for small businesses, designed to help aspiring entrepreneurs who may need more assets to put up as collateral. So, if you’re worried about putting up collateral to secure a loan, don’t be! There are plenty of government schemes that don’t require it.

Myth: Interest rates for government loans are no different from traditional bank loans 

The interest rate for government loans typically ranges around 3.5% – 4%, while a conventional loan’s lowest range hovers around 5% – 6%.

Fact: This can’t be further from the truth. One of the biggest advantages of government loans is that they often have lower interest rates than traditional bank loans. The interest rate for government loans typically ranges around 3.5% – 4%, while a conventional loan’s lowest range hovers around 5% – 6%.

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This is because government loans are backed by the government, making them less risky for any financial institution. As a result, lenders are often willing to offer lower interest rates to borrowers who qualify for government loans.

Myth: Government loans have shorter repayment periods than traditional loans.

Fact: This is another common myth, but it’s not always true. In fact, many government loan programs offer more extended repayment periods and more favourable terms than traditional bank loans. This is because the government is often more interested in helping small businesses succeed and grow than in making a profit.

Conventional loans don’t typically approve your application if your loan tenure is over ten years. Instead, most government loans allow entrepreneurs to exceed a decade to repay the loan.

Myth: If I default on a government loan, the government won’t help me

Government loan schemes typically provide coverage up to 80%

Fact: While defaulting on a loan is never a good idea, it’s important to know that many government loans offer some level of guarantee coverage in the event of default. This means that if you are unable to make your loan payments and the financial institution is unable to recover the money they loaned you, the government may step in and cover a portion of the losses.

The guarantee coverage varies depending on the loan program, but it can go up to 80% in Malaysia. So, if you are considering a government loan, be sure to ask about guarantee coverage and what it means for you in the event of default.

Myth: Harder to obtain than conventional loans

Fact: Because of its favourable terms, applying for a government loan in Malaysia can be competitive. However, it’s important to remember that there are many different loan schemes, and each has its own eligibility requirements.

This means that businesses of all sizes and industries have plenty of opportunities to get the funding they need. Some government loan programs have scheme limits as high as RM3 billion, so there is plenty of funding to go around.

Government loans are designed to help small businesses that may need help getting approved for traditional bank loans. This means that the eligibility requirements for government loans are often more flexible and less stringent than those for conventional loans.

So, don’t let the myth that it’s hard to get approved for a government loan hold you back. You may be surprised at how easy it is to get the funding you need to grow and succeed.

Myth: The application process takes forever

Your application can be approved within 3-5 working days

Fact: Many people are aware that government processes in Malaysia can be time-consuming. However, you might be surprised that government loan applications get approved much faster than you think.

Many government loan programs are designed to be quick and efficient, with approval times of just 3-5 working days. So, if you’re in a rush to get funding for your business, don’t assume that you’ll have to wait weeks or even months for a decision.

A Government Loan Malaysia Might Be The Solution To Grow Your Business

We hope this blog post has helped you separate the myths from the facts regarding government loans in Malaysia. Don’t be intimidated by all the information out there – take the time to do your research and explore your options. You might be surprised at what you find.

Remember, there are government loan programs for all sorts of purposes, not just business loans. So don’t be afraid to explore your options, such as a government personal loan or a housing loan scheme and see what’s out there. Good luck!

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