How To Get Funding For A Start-up?

Start-ups constitute a large part of small and medium-sized enterprises (SMEs) and play a major role in our economy. Together, they contribute 38% of Malaysia’s GDP and 60% of total employment in the country.

If you are already running a small business or are considering taking the leap to starting your own start-up, where should you start?

Making the decision to begin the startup journey is a big step, but what comes next is the hard part – getting there and, more importantly, having enough money to run a business.

Here are three steps to make your start-up dreams come true.

1. Have a business plan

It goes without saying that you should have a plan for making money, but it’s easier said than done. Home-based businesses may be able to get away with word-of-mouth and grassroots social media promotion, but your own local product may take more effort to get noticed.

For example, Twitter – one of the most popular social media platforms in the world – struggled for years to become profitable and only managed to stop losing money in 2018. However, it fell back. in the red in 2020.

The start-up road is filled with ups and downs, so it’s important to have a solid business plan before you start.

Forbes recommends these points for creating your business plan:

  • Come up with an exceptional and unique product or service
  • Have a solid plan and vision for the business
  • Have sufficient capital and cash flow
  • Find a good name for your business
  • Focus on creating a great product
  • Perfect your elevator pitch

For those hoping to start this starter trip in Malaysia, there are various government related agencies that can provide support like MaGIC (Malaysian Global Innovation & Creativity Center), MDEC (Malaysia Digital Economy Corporation), SMEinfo and for the bumiputeras there There is also MARA’s Entrepreneurial Development Division.

2. Obtain financing

No business can survive without money, and you will need it to start a business. There are a number of ways to get financing, including setting up your own savings to cover start-up costs. This is because you have to get the business off the ground in order to prove your business plan.

This stage is generally called the pre-seed stage for a start-up where the money invested often comes from personal connections. Once you’ve proven that you and your start-up have what it takes, the next step is to seek investors to fund the seed stage and, if you’re successful, seek more investment in them. series A, B and beyond to go big.

The Malaysian government is keen to encourage the ecosystem of SMEs and start-ups and offers many funding opportunities to these industries. Budding entrepreneurs can now turn to government agencies such as TEKUN, PUNB, TERAS, and Cradle Fund Sdn Bhd.

Many start-ups fail to survive the early stages of the journey due to lack of access to finance.

Here’s where Affin Bank Berhad / Affin Islamic Bank Berhad can help bridge that gap with SMEmerge / SMEmerge-i and unsecured corporate finance. Click here to find out what these financial initiatives can do for you.

3. Register your business

It is not only important to register your business, but also to decide on the type of business to register. A sole proprietorship will have different responsibilities than a limited liability company (sendirian berhad); and each type of business has its own advantages and disadvantages.

The Malaysian Business Commission (SSM) defines a business and a business differently (although people use the terms interchangeably). Starting a corporation offers limited liability for owners and shareholders, but you need to follow more regulatory requirements. However, starting a business has fewer requirements, but owners take more direct personal responsibility.

Whichever you choose, you will need to register with SSM in order to properly establish your business. Fortunately, SSM has put together some convenient online options for those who want to start the registration process. Sole proprietorships and partnerships can register their business on the ezbiz online portal, while limited liability companies can be incorporated through the MyCOID portal.

Even if you get funding from investors, managing your business finances, from day-to-day expenses to managing your overall working capital, requires experience and if you do not yet have the necessary business background it can be a difficult task.

Get help from AFFIN Start-Up Banking

Managing a start-up is not as easy as it seems. While you can do this part-time or do it all yourself at first, there is a time when you will need some help growing your business.

Affin Bank Berhad / Affin Islamic Bank Berhad has always been a strong supporter of SMEs in Malaysia, with a particular penchant for the start-up segment. Daring to grow with its clients, Affin Bank Berhad / Affin Islamic Bank Berhad aims to nurture and strengthen the ecosystem of SMEs from the start of their journey as a start-up, through to growth and expansion in Mature SMEs.

Affin Bank Berhad / Affin Islamic Bank Berhad can help meet the following start-up needs:

  • Banking facilities for daily transactions
  • Business protection to manage business risks
  • Financial assistance via working capital
  • Digital solutions as well as networking opportunities for advice and support

The working capital assistance comes in the form of two financial solutions. SMEmerge / SMEmerge-i Start-Up Financing helps new start-ups get started and overcome the challenges that threaten a new business.

On the other hand, unsecured business finance provides the funding that mature start-ups need to grow their businesses to become sustainable, long-term businesses.

SMEmerge / SMEmerge-i start-up financingUnsecured business financing
Commercial exploitation6 to 36 monthsMinimum 3 years
Loan / financing amountUp to RM300,000Up to RM1 million
MandateUp to 7 yearsUp to 7 years
CollateralNoNo

Affin Bank Berhad / Affin Islamic Bank Berhad is committed to providing ongoing support and encouragement to start-ups with unique proposals tailored to each stage of their business.

Affin Bank Berhad / Affin Islamic Bank Berhad Start-Up Exclusives also offers a step-by-step guide from start-ups to SMEs:

  • Support start-ups from the legal birth of their business
  • Develop start-ups into mature SMEs throughout their life cycle
  • Encourage start-ups to develop in the SME ecosystem
  • Equip start-ups with relevant tools and needs to facilitate their professional career

Start-ups can also join the SME Colony, a unique reference platform for entrepreneurs. This is Affin Bank Berhad / Affin Islamic Bank Berhad’s award-winning mobile app to help start-ups improve their understanding of business; improve financial well-being; and the expansion of business networking.

If you’re thinking of taking your business idea to the next level, now is the time to take it seriously by getting the financing you need to get the ball rolling.

To learn more about SMEmerge / SMEmerge-i and unsecured business finance, click here and find out what these financial initiatives can do for you.

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Jothi Venkat

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