Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsPurpose Product Usage Features Benefitsthe asset at theend of the tenure.• Allow SMEs to ownequipment andmachineries withouthaving to pay thefull amount upfront.• Facilitatemanagement offunds, as repaymentamount ispredetermined.• Free up availablefunds for otherpurposes.• A form of financingwhereby the asset ispurchased by thefinancial institutionand hired to SMEs,with the ownershipbeing retained bythe financialinstitution until theloan is repaid.• SMEs make periodicrepayments to thefinancial institution.To acquire capitalassets such asequipment andmachineries.IndustrialHire -PurchaseFinancial Guide for SMEsFlexibility in fundsmanagement in viewthat the OD iscontinuously available,provided the facilitiesare properly conductedand the businesscontinues to operatesatisfactorily.• A revolving loanmade available to abusiness customervia a currentaccount, wherebythe borrower maywithdraw therequired amounteach time by issuingcheques, as long asthe OD limit is notexceeded.• A commitment fee of1% is charged on theTo meet workingcapital needs i.e.payment of salaries,purchases, utilities etc.Overdraft(OD)Working CapitalYour business needsworking capital for theday-to-day running ofthe business. Generally,the most convenientform of financing wouldbe an overdraft facilityfrom commercial banks.Although flexible,overdraft can be quitecostly. You may becharged commitment9696chapter 7-13 p79-181 Eng.indd 968/15/11 5:02:56 PM