New Straits Times
22 June 2023
SJPP: Government guarantee schemes for business financing
Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) has provided assistance to over 60,000 SMEs and MSCs since its inception - File pic credit (Vecteezy)
COMPANIES and businesses often face numerous obstacles when seeking financing approval from financial institutions.
This includes challenges such as lack of collateral and dealing with high financing costs, which ultimately puts a strain on their finances.
Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) aims to assist business owners in this regard by offering government guarantee schemes to reduce business constraints.
SJPP'S ROLE
As a wholly-owned company of the Ministry of Finance Incorporated, the company is responsible for administering and managing government guarantee schemes.
The guarantee schemes serve as great alternatives for small and medium-sized enterprises (SMEs) and mid-sized companies to access financing facilities without the need for collateral.
These guarantee schemes by the government ensure and protect financial institutions for up to 90 per cent of the financing amount granted to eligible companies.
A total of nine government guarantee schemes are available at participating financial institutions, and the six main guarantee schemes managed by SJPP are as follows:
Additionally SJPP offers other government guarantee schemes which include:
- Pemulih Government Guarantee Scheme (PGGS)
- PENJANA Tourism Financing Facility (PTF)
- Bus and Taxi Hire Purchase Rehabilitation Scheme (BTHPRS)
GUARANTEE ELIGIBILITY
The scheme with the highest number of applications thus far is PGGS, as it is suitable for micro-businesses up to MSCs.
This particular scheme is open to entities with annual sales not exceeding RM500 million based on audited accounts (or income tax statements where applicable) for any financial year ending in 2019 or later, and meeting the following criteria:
- Sole proprietorships owned by a Malaysian citizen.
- Partnerships and limited liability partnerships controlled and majority owned by Malaysian citizens.
- Companies with at least 51 per cent of the shares are held and controlled by Malaysian citizens.
The applying company must also be registered under one of the following:
- Registration of Business Act 1956
- Companies Act 1965 or 2016
- Limited Liability Partnership Act 2012
- Authorities or District Offices in Sabah and Sarawak
- Statutory Bodies for professional service providers
Other terms and conditions may apply subject to financial institutions and SJPP.
22 FINANCIAL INSTITUTIONS
To ensure these guarantee schemes are accessible to the public, a total of 22 financial institutions are participating such as commercial banks, Islamic banks and development financial institutions under the purview of Bank Negara Malaysia, as well as non-banking financial institutions.
Entrepreneurs and businesses can check the list of participating institutions here.
For companies and businesses interested in applying for these guarantee schemes, be sure to check the business eligibility criteria and submit an application by providing complete documentation to the relevant officers at participating financial institutions.
The financial institutions will assess the applications. If a company or business does not have sufficient collateral or no collateral whatsoever, a complete copy of the application will be submitted to SJPP.
SJPP will evaluate the guarantee scheme applications for the purpose of guarantee approval. A guarantee fee of up to one percent per annum will be imposed on the protection guarantee, which needs to be paid in advance by the company or business.
APPLY FOR FINANCING WITH GOVERNMENT GUARANTEE SCHEMES MANAGED BY SJPP
Since its inception, SJPP has continued to grow through the announcement of various initiatives from the government that benefit over 60,000 SMEs up to mid-sized companies.
The government, via SJPP, is committed to strengthening cooperation with financial institutions to provide the best solutions to companies and businesses facing collateral-related challenges.
With this collaboration, the government aims to reduce financing issues that have been burdening many companies and businesses until now.
To find out more about the government guarantee schemes offered by SJPP, visit its website.
This article originally appeared on Harian Metro, with rights to be republished on the New Straits Times.
(Web Source: https://www.nst.com.my/business/2023/06/922924/sjpp-government-guarantee-schemes-business-financing )