Franchise Financing Scheme (FFS)

Eligibility Criteria

  • All Malaysian owned and controlled companies with net assets or shareholders’ funds not exceeding RM1.5 million;
  • Meet the SME Corporation Malaysia’s definition of an SME (for details, please click here);
  • The existing total credit facilities of the borrower should not exceed RM7.5 million. The borrower should not have any adverse record in respect of borrowing from any other financial institution or other agencies.

Maximum Loan Limit

  • RM7.5 million

Type of loan facilities covered

  • Term Loan;
  • Overdraft;
  • Trade Financing;
  • Any other credit facilities determined from time to time by the Corporation.

Interest Rate

  • The prescribed rate of interest charged by the PFIs will not exceed BLR +1.5%, while the actual cost to the borrower will be reduced through payment of subsidised interest whereby Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) via CGC will pay the difference for the loan interest in the manner as follows:
    Loan Duration Interest Rate Subsidised rate
    Year 1 & 2 BLR + 1.5% 6%
    Year 3 BLR + 1.5% 4%
    Year 4 BLR + 1.5% 2%
    Year 5 onwards BLR + 1.5% –

    Participating Financial Institutions

    • Maybank
    • CIMB Bank

    Guarantee Coverage

    • Unsecured portion will be covered 80% and 90% on the secured portion.

    Guarantee Fee

    Total credit facilities Unsecured Portion Secured Portion
    Loans up to RM1 million 0.75% 0.50%
    Loans above RM1 million 1.00% 0.50%

    1. Payment of Guarantee Fee
      • New Letter of Guarantee (LG) – Payable upon request for LG by Financial Institution (FI).
      • Anniversary LG – Payable on or before LG anniversary date.
    2. Refund of Guarantee Fee
      • Refund of guarantee fee will be pro rated on monthly basis. The utilised period is calculated from the month of LG/Anniversary LG until the month of cancellation/amendment.
      • The refund of guarantee fee on pro rated basis is applicable for LGs that are cancelled or amended by CGC commencing 2nd Jan 2013 onwards.

    Application Procedures

    • The Franchisor must be registered with MDTCC before the Franchisees can apply through this scheme.
    • MDTCC will ensure the validity of the franchisor and legal relationship between franchisor and franchisee.
    • MDTCC will compile the complete loan application together with working paper and forward it to the financial institution to proceed.
    • Upon receipt of the guarantee application from the financial institution, CGC will process and issue the guarantee letter accordingly.