Difficult For SMEs to Get Bank Loans Now

Small and medium enterprises (SMEs) are finding it difficult to get business loans from banks now, despite the government assurance that major banks are in a strong position to lend money.

Apparently, the banks have not been listening to the Bank Negara’s advice to make life easier for business owners, especially during the trying times.

Cautious over the global financial downturn has also stimulated the banks to give knee-jerk reactions when dealing with entrepreneurs. No loan will be extended when the bank feels that the applicant poses risks when it comes to loan settlement.

Companies in certain industries such as construction, transportation and automotive will also find it much more difficult to obtain financing now.

According to Steven Lim, the chairman of SMI Association of Malaysia Fund Raising Bureau, business owners face a tedious, lengthy process of obtaining loans.

A successful applicant, even with strong record and potential, may have to wait for three to four months before getting his or her loan approved, and this will eventually affect the business goals and outcome.

The SMEs make up the majority of business entities in Malaysia, and represent about 99% of all companies in the country. It contributes about 30% of the country’s growth domestic product (GDP) and provides more than 50% employment opportunities.

Other posts you may want to read:

1. SMEs Urged To Utilize Business Loans
2. TEKUN To Extend More Business Loans
3. How SME Bank Can Help You
4. 5 Financial Loans by SME Bank
5. Franchising Your Business

Author's bio: Zul is the founder and principal contributor for the SKOR Career blog. He is the author of two books, The Malaysian Job Seeker's Dilemma and Buat Duit Tanpa Kerja Makan Gaji (How to Make Money Without a Job), available in major book stores nationwide. You can reach him at zulkiflimusa[at]gmail.com.