Looking to expand your business, invest in new equipment, or increase working capital? A business loan can help you turn your plans into reality.
✅ Purpose of a Business Loan:
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Start a new business venture
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Expand existing operations
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Purchase machinery or equipment
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Manage cash flow during slow seasons
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Upgrade technology or inventory
📌 Common Requirements:
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Valid business registration
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Minimum business operating period: 6–12 months (varies by lender)
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Bank statements for the last 6 months
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Proof of income/revenue
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Good credit history
💲 Loan Amount & Tenure:
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Loan amount: RM10,000 – RM5,000,000 (depending on eligibility)
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Tenure: 1 – 10 years
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Interest rates: From 3.5% p.a. (varies by lender & profile)
⚠️ Important Tips Before Applying:
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Check your credit score (CCRIS/CTOS)
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Prepare all required documents in advance
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Choose a repayment term you can comfortably manage
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Compare offers from multiple banks and lenders
Requirements for a Business Loan
Whether you’re starting or expanding your business, knowing what lenders expect can help streamline your application and increase your approval odds.
1. Credit Scores & Credit History
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Personal Credit Score: Lenders typically look for a FICO® score of 690 or higher for SBA or traditional bank loans. Online lenders may accept lower scores if your business shows strong cash flow.
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Business Credit Score: Many lenders check your business credit (Experian, Equifax, Dun & Bradstreet). For SBA 7(a) loans, your SBSS score must be 165 or higher.
2. Time in Business & Industry
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Most lenders require at least 2 years of business operation. Startup-specific lenders may consider businesses with as little as 6 months in business.
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Some industries (like adult entertainment or gambling) may be off-limits. Ensure your business type is eligible.
3. Financial Stability & Documentation
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Prepare and submit:
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Business financial statements (income statement, balance sheet, cash flow)
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Bank statements (usually last 6–12 months)
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Business and personal tax returns.
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Lenders evaluate your Debt-Service Coverage Ratio (DSCR)—ideally 1.15 to 1.25 or higher—to ensure you can manage loan repayments.
4. Business Plan or Loan Proposal
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Include:
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Purpose of the loan
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Financial projections (1–5 years)
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Market research and competitive analysis
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A strong, organized plan shows lenders you’ve thought ahead and are ready to grow.
5. Collateral & Personal Guarantee
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Collateral: Often required—this could be real estate, machinery, or inventory. Some lenders may accept a blanket lien on business assets.
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Personal Guarantee: Owners with 20% or more equity typically need to guarantee the loan personally.
6. Required Documents Checklist
Lenders may ask for:
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Business licenses, EIN, incorporation papers
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Bank statements and tax returns (personal & business)
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Financial statements and projections
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Insurance documents, leases, legal contracts.
7. Special SBA Loan Considerations (7(a) Program)
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Must be a for-profit U.S. business with SBA size eligibility and proof it can’t get conventional financing.
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Requires personal guarantees and often collateral, especially for loans over $50,000.
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Interest rates are typically set at prime + 1% to 3% (depending on loan size/type).
8. Tips from Real Business Owners
A credit score of 680+ significantly improves your approval chances. If your credit isn’t perfect, consider adding a cosigner, or exploring options like startup loans or microloans.
If you’re new, lenders may still proceed if you have a strong business plan and good personal financials.