Budget 2027, tabled on 9 October 2026, allocates RM459.84 billion, including RM57 billion in business financing and guarantees for small and medium enterprises (SMEs) and micro, small and medium enterprises (MSMEs). Alongside government financing, there are several grants SMEs can apply for, from equipment and training grants to halal certification and AI adoption funds (Budget 2027 Speech, MOF). Below are the key grants and government financing schemes for Malaysian SMEs announced in Budget 2027, along with alternative financing options.
A quick note on terms: a grant does not need to be repaid, while financing and guarantees do. Most of the larger Budget 2027 allocations are financing schemes, so we have labelled each one below.
SME Grants in Malaysia (Budget 2027)
1. Geran Sejahtera MADANI (Grant)
RM200 million is allocated for Geran Sejahtera MADANI, which provides equipment and training to 40,000 recipients, particularly women. It is aimed at small and home-based businesses that need tools or skills to grow.
2. Halal Certification Grants (Grant)
MSMEs applying for halal certification for the first time can get a matching grant of up to RM5,000. A separate RM25,000 grant is available for halal MSMEs in fields such as cosmetics and pharmaceuticals.
3. MDEC Fund for AI and Automation
A RM30 million Malaysia Digital Economy Corporation (MDEC) fund will help 4,000 MSMEs adopt AI and automate their operations. Details on how to apply are expected from MDEC.
4. SME Digitalisation Grant (Grant)
The MSME digitalisation grant offers a 50% matching grant of up to RM5,000 per business to upgrade sales, inventory and accounting systems (MDEC). Check with MDEC on whether applications are currently open.
5. Selling Online: NADI and Jom Malaysia
Pusat Sebaran Maklumat Nasional (NADI) receives RM142 million to help more young entrepreneurs sell online, and Jom Malaysia receives RM10 million to bring rural products and services to digital platforms and overseas markets.
Government Financing for SMEs (Budget 2027)
6. Business Financing and Guarantees (RM57 Billion)
Total business financing and guarantees rise from RM50 billion in 2026 to RM57 billion in 2027. This includes guarantees of up to RM32 billion through Syarikat Jaminan Pembiayaan Perniagaan (SJPP) and Credit Guarantee Corporation (CGC), which help SMEs get bank financing even with limited collateral. SJPP guarantees are now open to mid-tier companies in all sectors, and RM1 billion in SJPP guarantees is set aside for mergers and acquisitions. You apply through participating banks, which assess eligibility before forwarding the application.
7. Bank Negara Malaysia SME Fund
Bank Negara Malaysia is adding RM5 billion to its financing fund for SMEs affected by the West Asia conflict, bringing it to RM10 billion. It provides working capital through participating banks.
8. Microfinancing (RM6.6 Billion)
Microfinancing rises to RM6.6 billion in 2027:
- Amanah Ikhtiar Malaysia (AIM): RM3 billion for 360,000 entrepreneurs
- TEKUN Nasional: RM1.3 billion for Bumiputera entrepreneurs
- Bank Simpanan Nasional (BSN): RM1.7 billion for youth, gig workers, hawkers and vulnerable groups
- TEKUN and AIM: RM150 million for Indian entrepreneurs
BSN and Agrobank are also providing RM270 million to finance gig workers who want to start a business or buy their first home.
9. Financing for Bumiputera Entrepreneurs
Perbadanan Usahawan Nasional Berhad (PUNB) increases its financing fund to RM500 million, from RM350 million. Unit Peneraju Agenda Bumiputera (TERAJU) provides financing of up to RM1 billion, and the RM250 million Dana Ciptawan by Khazanah and TERAJU supports Bumiputera mid-tier companies.
10. P2P Financing and Equity Crowdfunding (RM270 Million)
RM270 million is set aside to attract private capital to SMEs, mid-tier companies and social enterprises through peer-to-peer (P2P) financing and equity crowdfunding (ECF) platforms. The agency and details have not yet been announced. Funding Societies is one of the P2P financing platforms in Malaysia, and Modalku Ventures Sdn Bhd is registered with the Securities Commission Malaysia.
11. Export Support
Bank Pembangunan Malaysia Berhad (BPMB) provides RM1 billion in export financing for MSMEs, and the Malaysia External Trade Development Corporation (MATRADE) receives RM60 million to help local companies enter and diversify overseas markets. You can register as a MATRADE member through its website.
12. Startup Funding
RM450 million will be invested in startups through Jelawang Capital (Khazanah) and KWAP’s Dana Perintis, along with RM41 million for Cradle Fund.
For the full list of Budget 2027 initiatives for SMEs, read our Budget 2027 summary for SMEs.
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 as little as five working days, perfect for urgent purchases to expand your business. Micro Financing/-i 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 a credit line of up to RM1 million, with advances of up to 80% of the 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 and are structured using Commodity Murabahah (tawarruq), 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 secured an RM100 million financing facility from AmBank. - 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 2027, businesses can access various SME grants and government financing schemes 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:
Ministry of Finance Malaysia – Budget 2027 Speech
https://belanjawan.mof.gov.my/pdf/belanjawan2027/ucapan/ub27.pdf
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
