The Malaysian government announced Budget 2025 with a total allocation of RM421 billion, an increase from last year’s RM393.8 billion (Budget 2025 Speech, MOF). This allocation increase means more financial aid and support for small and medium enterprises (SMEs). SME owners looking to expand their businesses can now benefit from various grants and financing options to ease cash flow constraints and encourage growth. Below, you can explore the key grants and financing options available to Malaysian SMEs in 2025, along with alternative financing solutions.
Key Grants for Malaysian SMEs
Below are some of the most notable SME grants listed in Malaysia’s Budget 2025 and the upcoming Budget 2026:
1. Loans and Financing for SMEs and Micro Enterprises
Budget 2026 allocates RM50 billion for business financing, with RM2.5 billion earmarked explicitly for micro-loans through TEKUN and Bank Simpanan Nasional (BSN) (Maybank). These funds target small traders, including Bumiputera entrepreneurs, disabled individuals, and members of the Chinese and Indian communities.
The loans support business expansion, automation, and productivity improvements, ensuring that even the smallest enterprises can access vital capital. You can apply through the websites of TEKUN and BSN by submitting the necessary business registration documents and financial statements.
2. SJPP Loan Guarantees for SMEs
This SME grant provides RM20 billion in loan guarantees via the Syarikat Jaminan Pembiayaan Perniagaan (SJPP), of which RM5 billion is for Bumiputera SMEs (Crowe). This initiative helps SMEs secure financing, even those facing challenges with collateral.
Therefore, it’s the ideal option for SMEs with viable business models but lacking collateral. Businesses can apply through partner banks to obtain this grant. The bank will assess their eligibility before forwarding the application for SJPP approval.
3. Bank Negara Malaysia (BNM) Loan Funds
To support technology adoption and sustainability initiatives, BNM offers RM3.8 billion for various financing schemes, such as the SME Automation and Digitalization Facility (ADF) and the High-Tech and Green Facility (HTG) (Budget 2025 Touchpoints, MOF).
You can apply through banks offering this kind of grant via their websites. Remember to include a solid business plan and project proposal.
4. Digitalization Grants for SMEs
The SME Digitalization Initiative provides a 50% matching grant of up to RM5,000 per SME to support digital marketing, e-commerce, and enterprise resource planning (ERP) systems (MDEC).
To apply, SMEs can submit their applications via the Malaysia Digital Economy Corporation (MDEC) or SME Bank, together with quotations from registered technology vendors.
5. Infrastructure Upgrades of Public Markets under Local Authorities
If you are a small-scale trader operating in public markets managed by Local Authorities, you may benefit from the Infrastructure Upgrade Grant of RM100 million. This fund will also be used in providing additional business spaces for small traders at Tamu Desa in Sabah and Sarawak (Budget 2025 Touchpoints, MOF).
Licensed micro and small enterprises operating in fixed premises can apply through local municipal councils with proof of business operations.
6. Special Financing for Women and Youth Entrepreneurs
Budget 2025 dedicates RM650 million to support women and youth who want to start their businesses (Budget 2025 Speech, MOF). This grant is available for women-led SMEs and entrepreneurs aged 18–40. Once you fulfil the criteria, you can apply through banks or government agencies such as TEKUN Nasional.
7. Insurance and Takaful for Micro-Entrepreneurs
Budget 2025 has also dedicated RM5 million to insurance and takaful schemes aimed at hawkers, small traders, and delivery riders earning less than RM4,000 monthly (Budget 2025 Touchpoints, MOF).
As a result, they can be prepared for unexpected risks and keep their business afloat. Eligible applicants can enroll via insurance providers partnered with the government, such as Etiqa, Allianz, Great Eastern, and many more.
8. Financing and Support for Bumiputera Entrepreneurs
Bumiputera contractors (G1-G4) are eligible for an RM1.3 billion SME grant, while Majlis Amanah Rakyat (MARA) and PUNB agencies will receive RM800 million to support Bumiputera entrepreneurs (Budget 2025 Touchpoints, MOF). You can apply through their websites if you wish to obtain this grant.
9. Support for Startups
The National Fund-of-Funds (NFOF) for startups will receive an RM1 billion grant, of which RM65 million consists of extra funds from the Cradle Fund (Budget 2025 Speech, MOF). Early-stage startups with scalable business models can apply through the websites of agencies like Cradle Fund or MDEC.
10. Creative Social Entrepreneurs
Under the MADANI Creative Youth Program, which receives RM30 million, entrepreneurs in creative sectors such as arts, design, and social enterprises can receive an SME grant dedicated to videography and filmmaking training (Budget 2025 Touchpoints, MOF).
11. Export Market Support
The government aims to support mid-tier businesses looking forward to exporting their products overseas with an RM1 billion allocation for such grants. As part of supporting sustainability, this grant also provides RM750 million to EXIM Bank and RM60 million to MATRADE for international promotion (Crowe). Therefore, you can register through MATRADE’s official website by becoming a MATRADE Member and subscribing to the MyExport service.
Alternative to SME Grants
Aside from the mentioned grants above, you can also consider Funding Societies’ financing options as follows:
1. Micro Financing
Micro Financing offers quick, simple access to extra capital of up to RM200,000 in less than five working days, perfect for urgent purchases to expand your business. This financing solution is available for sole proprietorships, partnerships, and private limited companies registered with SSM, operating for at least six months, and generating at least RM5,000 in monthly revenue (or RM60,000 yearly). Furthermore, your business should have at least 30% of shares held by Malaysians.
2. Invoice Financing
Invoice Financing is ideal if you have many outstanding payment invoices from your clients, as it allows you to convert them into cash. Simply provide your purchase or sales invoice to get up to RM1 million in financing (80-100% of your total invoice value). Once you’ve received the funds, you can repay them over a tenure of up to 120 days.
3. Islamic Financing
Funding Societies’ Islamic Financing options comply with Shariah principles, focusing on profit-sharing agreements and asset-based funding, with no collateral required. Available options include Invoice Financing, Business Term Financing, and Micro Financing. Islamic Financing is suitable for businesses registered as Shariah-compliant according to the Masryef Shariah Committee guidelines.
Alternative Financing vs Traditional Bank Loans
While traditional bank loans remain a primary source of financing thanks to their long-term stability, alternative options like microfinance, invoice financing, and crowdfunding provide flexibility and accessibility. These alternatives benefit SMEs with limited collateral or those seeking quicker approval processes.
Applying for SME Grant: Tips and Tricks for Your Success
Applying for SME grants requires preparation and a strategic approach. Here are essential tips to improve your chances of success:
- Research the grant’s benefits
Before diving into the application process, thoroughly research the specific grant you’re interested in. Understand its objectives, the types of projects it funds, and the particular benefits it offers. Don’t just focus on the monetary value. Consider the non-financial benefits, such as mentorship programmes, networking opportunities, or access to resources, which can be equally valuable for your business. - Ensure your business meets the eligibility criteria
Grant providers have specific eligibility criteria that businesses must meet to qualify for funding. These criteria can include factors like company size, industry sector, length of operation, annual turnover, and project location. Carefully review the eligibility requirements and honestly assess whether your business meets them. Contact the grant provider directly if you are unsure about any criteria. - Organise your financial records
Accurate and well-organised financial records are essential for a successful grant application. Grant providers need to see a clear picture of your business’s health and stability. Ensure your financial statements, including profit and loss statements, balance sheets, and cash flow projections, are up-to-date and accurate. If your financial records are disorganised, it can raise red flags for the grant provider and negatively impact your application. Consider engaging a professional accountant to help you prepare and organize your financial documents. - Prepare a complete business plan
An in-depth business plan demonstrates to the grant provider that you understand your business and have a well-defined plan for using the funds. Therefore, your plan should clearly articulate your business’s vision, mission, goals, target market, competitive landscape, and financial projections. It should also detail the specific project for which you’re seeking funding, including its objectives, implementation plan, timeline, and budget. - Send your complete application on time
Lastly, submit your complete application package, including all required documents, by the specified deadline. Late applications are typically not considered, regardless of their merit. Give yourself ample time to prepare your application and avoid last-minute rushes. More importantly, double-check all the required documents and ensure they are correctly filled out and signed.
Example of Successful SMEs with Grants and Alternative Financing
While grants can be a valuable funding source, many successful Malaysian SMEs utilise a combination of grants and alternative financing options to fuel their growth. Here are a few examples:
- Carsome
This online platform for buying and selling used cars has leveraged venture capital funding and strategic partnerships to expand its operations across Southeast Asia. For instance, in 2024, it received an RM100 million capital injection from AmBank to improve its services and market itself in various countries. - Les Copaque Productions
The renowned animated series “Upin & Ipin” creators have benefited from MOSTI’s e-Content fund to support their operations. They also received grants from MDeC for overseas promotions and MIMOS for rendering infrastructures. Thanks to this assistance, Les Copaque Productions has expanded its intellectual property to many countries, including animated movies and physical merchandise. - Anita Fragrance Cosmetic Laboratory
This body care and cosmetics product retailer, wholesaler, and producer received a startup grant from the SME Corporation and MATRADE initiatives. Through these funds, they successfully sourced better ingredients for their product formulations and invested in extensive R&D with the best talent, further strengthening customer trust. - Eliqa Enterprise
Eliqa Enterprise, a Selangor-based business selling various semprit cookies, received additional funds from Funding Societies. It needed the extra capital to keep up with the drastic increase in order volume during the lead-up to Hari Raya. Thanks to these funds, Eliqa Enterprise could fulfil more orders and grow its business scale. - Heron Solutions
In 2022, Heron Solutions strived to expand its fleet of vehicles, acquire more talented employees, and invest in marketing to seize the post-pandemic economic growth. That’s when Heron Solutions applied for additional funding from Funding Societies, reinforcing its commitment to live up to its business mission as a one-stop security systems solution for commercial and individual clients.
With increased funding allocated in Budget 2025, businesses can access various SME grants to grow their business. However, SME grants are not the only solution available; alternative financing solutions, such as Invoice Financing, Islamic Financing, and Micro Financing from Funding Societies, can also benefit you. They all offer quick capital injection with accessible terms and flexible repayment tenures.
Sources:
UOB Malaysia – Budget 2025: Key Highlights for SMEs
https://www.uob.com.my/business/sme-hub/insights/budget-2025-sme.page
Funding Societies Malaysia Blog – Budget 2025 Malaysia: What It Means for SMEs
https://blog.fundingsocieties.com.my/budget-2025-malaysia-for-sme/
MYStartup – How Startups Can Apply for Government Grants in Malaysia
https://www.mystartup.gov.my/news-events/articles/foITHUyKlIJ3RAe/how-startups-can-apply-for-government-grants-in-malaysia
Sync PR – Grants and Finance Aids for SMEs in Malaysia (2024)
https://syncpr.co/2024/02/29/grants-and-finance-aids-for-smes-in-malaysia/
Slurp! POS Blog – How to Apply for Government Grant Fundings for SMEs in Malaysia
https://old.getslurp.com/blog/how-to-apply-government-grant-fundings-for-sme-malaysia/
Carsome Newsroom – Carsome Secures RM100 Million Financing Facility from AmBank
https://news.carsome.com/news/carsome-secures-rm100-million-financing-facility-from-ambank-the-largest-bank-backed-facility-for-the-group
SME Corp Malaysia – Les’ Copaque Production Sdn Bhd (Success Story)
https://smecorp.gov.my/index.php/en/les-copaque-production-sdn-bhd/book/48/1?page=3
SME Corp Malaysia – Anita Fragrance & Cosmetic Laboratory (Success Story)
https://smecorp.gov.my/index.php/en/anita-fragrance-cosmetic-laboratory/book/37/1?page=3
YouTube – SME Success Story: Les’ Copaque Production Sdn Bhd
https://www.youtube.com/watch?v=ykfcQNacLxw
YouTube – SME Success Story: Anita Fragrance & Cosmetic Laboratory
https://www.youtube.com/watch?v=Z-uv3aQZ3XE
Funding Societies Malaysia – SME Micro Financing
https://fundingsocieties.com.my/sme-financing/micro-financing
Funding Societies Malaysia – Invoice Financing (Payable)
https://fundingsocieties.com.my/invoice-financing?tab=payable
Funding Societies Malaysia – Islamic Financing
https://fundingsocieties.com.my/islamic-financing
Crowe Malaysia – Key Highlights of Malaysia’s Budget 2026 (Newsletter PDF)
https://www.crowe.com/my/-/media/crowe/firms/asia-pacific/my/crowemy/news/key-highlights-of-malaysias-budget-2026–for-individuals-and-businesses-newsletter.pdf?rev=7a91b3e816814d5697982671b0761f29&hash=9BDCE33E8C2F7936C8FF97DC5C76127B
Maybank Malaysia – Budget 2026 Highlights for Everyday Malaysians & SMEs
https://www.maybank2u.com.my/maybank2u/malaysia/en/articles/headlines/local/budget-2026-highlights.page
