3 Types of Alternative Business Lenders (Non-bank) in Malaysia
If you’re an F&B owner, there are always ways for you to finance your business – be it to boost your capital for business growth, invest in new equipment ventures, or even to acquire new office.
There are quite a few types of loans provided by non-bank available out there, but even with the advice from your preferred loan agent on which loan you should apply for, how will you know if it’s really the best option for you and your business?
Fret not, we wrote this article to help you decide. We care and understand how important it is to choose the right loan to lessen the business costs (such as the fees and interest charges) and to secure your business’ financial future.
Hence, we have compiled these 3 most common types of loans (non-bank) that can help you boost your business.
1. Personal Loan
Personal loans are money you can borrow from a financial institution which you are required to pay back within a predetermined period.
A personal loan has 3 main components: loan amount, loan period, and loan interest rate.
Typically, applicants apply for personal loans for a variety of personal reasons such as to pay off education fees, mortgages, wedding expenses, settle personal debts or anything really – as long as it’s not for business purposes.
There are two types of personal loans in Malaysia:
Secured personal loans:
These personal loans are backed with a guarantor or collateral in the form of fixed deposit account, property or unit trust attached.
Unsecured personal loans:
This is a more common type of personal loans which does not require the applicant to pledge for any collateral or guarantor. Unsecured personal loans are generally for people who need cash in advance and urgently.
2. Commercial Loan
This is a debt-based funding arrangement between a business and a financial institution such as a bank.
It is typically used to fund major capital expenditures and/or cover operational costs that a company may otherwise be unable to afford on its own.
Expensive upfront costs and regulatory hurdles often prevent small businesses from having a direct access to bond and equity markets for financing.
This means that unlike individual consumers, smaller businesses must rely on other lending products such as a line of credit, unsecured loans or term loans.
Crowdfunding is a method of raising capital through the collective effort of friends, families, customers, and individual investors.
This approach taps into the collective efforts of a large pool of individuals — primarily online via social media and crowdfunding platforms — and leverages their networks for a greater reach and exposure.
Crowdfunding is essentially the opposite of the mainstream approach to business finance.
Traditionally, if you want to raise the capital to start a business or launch a new product, you would need to prepare your business plan, market research, and prototypes.
After that, you would need to pitch around your ideas to a limited pool of wealthy individuals or institutions. These funding sources include banks, angel investors, and venture capital firms.
You can think of this fundraising approach as a funnel. Imagine you and your pitch are the wide end and your audience of investors are the narrow end.
Failure to point the funnel to the right investor or firm at the right time may cost you time and money.
It is not uncommon to hear Food & Beverage (F&B) business owners having troubles getting financing for their businesses.
With lesser support available for startup financing and working capital, it is the trigger reason why a number of F&B businesses failed.
Clearly, the market needs to realize much easier access to F&B financing for these entrepreneurs to achieve their business goals immediately.
But with more and more alternative lenders funding “riskier” small businesses lately, accessing restaurant financing is getting easier and easier for F&B owners.
With that said, we are going to let you in on a little secret. Do you know there’s another way for your business to get funded?
All you need to do is to be a user by signing up on Dropee.com and you are eligible to apply for our business financing.
Boost Your Business Cash Flow with Dropee SME Business Financing
This is the fastest and simplest way to fund your F&B business. Why so?
1. It’s simple
F&B owners can easily apply online within minutes with minimal documentation and no collateral required.
2. It’s flexible
You can get working capital financing up to RM 200,000 with a payback period between 6 to 12 months.
3. It’s fast
Instant approval on your financing application within 3- 7 working days.