Small and Medium Enterprises, better known as SME’s contribute much to the growth of the economy in Malaysia. It has been observed that SMEs contributed to more than one-third of the GDP of the country and accounted for more than 66% of the market share in generating employment for the nations.
Over the years, small and medium enterprises have witnessed substantial growth in the country, especially in relation to the increasing penetration over the years. But since the obstruction brought in by the pandemic, several SMEs are struggling to arrange finance.
For their benefit, P2P financing has gained relative importance allowing the enterprise to directly acquire funds from individual borrowers rather than reaching the traditional banks. Peer-to-Peer lending allows businesses and individuals to ask for a substantial amount of funds directly from the lenders and without getting under the realm of banks or middlemen. Borrowers can choose to have a different range of funding obscured flexibly in Malaysia at a lower interest rate and seamless repayment options.
Why P2P for Small & Medium Enterprises?
You must be having confusion about how this peer-to-peer lending is different from regular loans? And what are the possible reasons for enterprises to avail of this option, especially during the urgent need of funds? Well, the following reasons will help clarify the picture:
- Submit Request within Minutes: Like the traditional loans, there will be no hassle for borrowers to make several rounds of the bank and wait for days to source the required finance. P2P offerings are available online through a specific platform, where you can directly connect with the lender and apply digitally.
- Fast Approval & Instant Money: Get the required finance in a maximum period of 1-2 weeks after getting the approval. There will no such kind of financial delays on the part of any middleman or bank involved.
- No Collateral Required: One of the reasons why SMEs switch to the peer-to-peer lending process is there’s no requirement of giving anything as security. You can leverage the feature of borrowing money for business growth with no collateral required.
- Lower Rate of Interest: Since P2P lending makes direct contact between the borrower and the lender. So, there is no higher rate of interest involved. If you have a solid credit background, then you will get the finance at a lower interest rate.
Necessary Prerequisites of P2P Financial Option
To qualify for this low-rate financial offer in Malaysia, enterprises need to meet few necessary preconditions set out by the Securities Commission (SC) of Malaysia that are as follows:
- Your company must be registered with the Companies Commission of Malaysia (SMM) or with any local authority as a business entity. It should be registered as a limited liability partnership, sole proprietorship, partnership, private limited, or an unlisted public company.
- You can apply for only 1 funding on the P2P lending platform, unless and until you have another funding on another platform for a different purpose.
Conclusion
Arranging finance for the much-needed business growth is no longer a hassle for SMEs in Malaysia. The profitable concept of P2P lending is a result-oriented fiscal offer for companies to arrange finance at cost-effective rates. So, no need to look here and there for instant monetary aid. Just rely on peer-to-peer borrowing offers to stay out of the fiscal troubles.
Author’s Bio:
Drew Galloways
Drew is a fiscal fanatic mind that writes extensively for financing, P2P investment in Malaysia, and several other fiscal offers. He knows very well about the financial offerings available for individuals and companies.
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