KNOW VARIOUS METHODOLOGIES OF HOW FINANCIAL INSTITUTIONS AFFECT SME FINANCING SOLUTIONSPowered by Malaysia Home Loan

Acquire business equipment Renovation purposes Transportation Purchases Service(s) acquisition Raw material purchases Hiring Workforce Property purchase/rental Technology purchase Insurance

•Term Loan•Leasing•Industrial Hire Purchase•Overdraft•Revolving Credit•Factoring•Letter of Credit•Trust Receipts•Banker’s Acceptance•Bills of Exchange Purchased•Foreign Exchange Contracts•Export Credit Financing•Bills for Collection (Outward & Inward)•Bank Guarantee•Shipping Guarantee

Identify Financing Purpose(s)

DAY TO DAY OPERATIONS FUNDING

OVERDRAFT FACILITY (OD)

To meet working capital needs

Flexibility in funds management

Day-to-day operations are financially satisfied.

Commitment fee charge – 1% of unutilized portion of funds.

Interest calculated on daily basis

REVOLVING CREDIT

To meet short term working capital needs

Lower financing costs Continuous availability of

funds Convenient form of short

term financing Loan granted for fixed

period Loan can be rolled over only

upon expiry

FINANCING FOR SMEs IN DOMESTIC AND INTERNATIONAL TRADE

Factoring Short term financing of trade debts. Discounted trade invoices purchase. Provide cash advances for business purposes. Easily obtainable No collateral required Able to be competitive in terms of credit

(Prices)

Letter of Credit (LC) Import or local purchase of goods. Financial pay material/service provider subject to

T&C. Lower price of goods and longer payment terms. Can assure payment to the beneficiary. Documents presented examined by trade

financing specialists. Less communication with foreign supplier (if any)

Trust Receipts Extends credit facility on bills drawn under

bank’s own LC (see above) Accept delivery prior to payment on sight

(PoD) Enables prompt payment to the supplier. Take delivery (orders) without upfront

payment (PoD) Ease cashflow

Banker’s Acceptance (BA) Financing export, import or domestic trade

transactions. Bills for products are paid on a specific future

date. Provides better cash flow before proceeds. Provides two-way financing as BA financing is

applicable to sales and purchases.

A LEGAL UNDERTAKING BY A FINANCIAL INSTITUTION TO GUARANTEE PAYMENTS

TYPES OF BANK GUARANTEE

Bid Bond/Tender Performance Advance Payment Warranty of Maintenance Retention Security

*all end with Guarantee

USES OF A GUARANTEE

Favouring the third party in terms of performance (purchases, payments, delivery)

Private Debt Security for Corporates.

Benefits Portrays customer capability to perform

service/product/work. Obtain more favourable trade terms. Funds to be used to support working capital

requirements. Release of retention funds under contract. Customers can access funds for advance

payments.

Expedite the release of goods which arrives before original transport documents.

Facilitate production and/or contract deadlines.

Release the goods without production of original transport document.

Imported under LC and is to be earmarked against TR/BA facilities

THANK YOU FOR JOINING US.