The cost of establishing a business in Malaysia can be as high as hundreds to millions of ringgits. Business owners may need to consider equipment expenses, marketing, personnel costs or business registration costs. Apart from the initial capital for company incorporation, business owners may also need additional funds along the way, such as funds to finance larger business projects or overcome difficulties in day-to-day operations.

Fortunately, there are several ways to raise funds for their business goals. This article highlights six main ways business owners can fund their business in Malaysia.

Personal Loan

Personal loans might not be the first financing method business owners may think of, but they can be a great way to quickly get a small amount of capital. They are suitable for micro-businesses that do not require large amounts of capital, such as food truck businesses or home bakeries.

Business owners intending to opt for a personal loan must have a good credit score and a stable income history. These loans are often easier to obtain than corporate loans, which may only qualify businesses that have been running for several years. Certain loans also release funds within one business day, which is very helpful during emergencies.

The caveat of this loan is that its lower financing limit is between RM 50,000 and RM 200,000. The limit may depend on the company’s income. It also tends to have relatively higher interest rates than corporate loans. Also, self-employed business owners can find it difficult to qualify for this loan.

Business Loan

Business loans are more difficult to obtain than personal loans. Businesses may need to be in operation for several years to qualify for it. They may also need to provide a guarantee to qualify for more funding.

Moreover, there are certain restrictions on the funds received. For instance, a company may not be able to use them to buy real estate investments or stocks. On the positive side, business loans can raise a large amount of money, from RM 10,000 to several million ringgits. Still, the funding limits depend on the business operations and if the company offers collateral. They also charge an annual interest rate of about 5% to 7% per year, which is generally lower than the personal loans’ interest rate, which can be up to 18% per year.


Crowdfunding raises funds via a large number of individual investors. Crowdfunding comes in various types, including reward-based, donation-based and equity crowdfunding.

Fundraising through crowdfunding can be easier than fundraising through grants and bank loans because its qualification requirements can be less stringent. Reward-based or donation-based platforms may not even need a history of business operations.

The downside of this funding is that certain platforms will refuse to disburse any funds if the business does not reach a set funding, even after it has spent money, time and effort into creating its campaign.

Schemes and Grants

Government or corporate programs can provide a large amount of funding, grants, or networking and mentorship opportunities with little to no interest. Nevertheless, every funding program has a set of qualifications. Some programs are only available for particular companies or demographics. Moreover, certain grants may be competitive and require multiple rounds of assessment before the application is accepted.

P2P Lending

Peer-to-peer or P2P lending, also known as debt-based crowdfunding, refers to investors raising funds to lend to companies. It has a lower financial and operational qualification requirement. Hence, business owners who are not qualified for a business loan may opt for P2P instead. It also provides fast financing for businesses that borrow a small fund.

However, P2P platforms often charge a higher interest rate than banks, up to about 18% per year, since investors expect higher returns in place of higher risks. These charges are in addition to the fees that the platform itself charged, which can be a percentage cut of the loan.

Angel Investors and Venture Capital

Angel investors are high net worth people who invest their money in early-stage companies. On the other hand, venture capitalists are individuals or companies that provide funds to businesses with high growth potential.

Angel investors and venture capital can have huge benefits for start-ups. They can offer a great deal of funding, guidance, or networking opportunities. Business owners may not even have to repay if their business fails. However, they are often competitive. Entrepreneurs must show that their business or ideas have decent long-term growth possibilities.

Getting Help From Financial Audit Firms in Malaysia

A professional financial audit firm helps business owners perform thorough financial audit procedures to inspect the company’s financial statements. The information gathered can be utilised to demonstrate to stakeholders and potential investors that the company has sound financial practices. Some lenders need an audit to determine the company’s qualification for a bank loan, lines of credit and other loan types.