KUALA LUMPUR, May 11 -- Technology start-up companies may submit their application for the RM100 million Technology Start-Ups Funding Relief Facility (TSFRF) from May 18-31, 2020, said Malaysia Debt Ventures Bhd (MDV).
In a statement today, MDV, an agency under the Ministry of Science, Technology and Innovation (MOSTI), said subsequent application windows for the fund will be opened until the entire sum is fully utilised.
It said the TSFRF will be funded via a soft-loan from the government to MDV, and the facility will be available at an interest rate of 3.50 per cent per annum on the amount outstanding.
“The start-up companies must fulfil one of the following criteria -- the majority of the company’s equities are owned by Malaysian(s), the majority of its staff are Malaysians, or the majority of the company’s revenues are generated in Malaysia,” it added.
According to MDV, companies may apply for the TSFRF to fund their business capital and business expansions.
The facility aims to provide immediate, affordable and targeted cashflow support for venture capital companies or government agency-backed technology start-up companies that are impacted by the current adverse economic conditions and funding disruptions due to COVID-19.
“This is to ensure that they are able to sustain their business operations during this difficult time,” it said.
MDV chief executive officer Nizam Mohamed Nadzri said the TSFRF is similar to a revolving credit facility, which means that disbursements can be requested on demand or based on the applicant’s six-month rolling cash flow requirements.
Outstanding balances of the principal can be rolled-over semi-annually, providing flexibility in managing repayment, he said.
“What this means is that applicants would have the option to service the financing interest, while principal repayment can be brought forward to the next six months and so on until the expiry of the facility tenure,” he added.
Nizam said the TSFRF is meant to address liquidity challenges faced by tech start-ups in this current period by providing on-hand working capital facilities to mitigate cashflow issues. It is also meant to shorten time-to-money through lesser application requirements, shorter due diligence and credit assessment processes, minimal legal documentation requirements as well as quick disbursement processes, he said.
“Tech start-ups will also not have to bear any additional fees and charges for the facility. “Most importantly, no hard collateral is needed under the TSFRF. As part of our risk mitigation measure, applicants are only required to provide personal guarantee and debenture,” he added. -- BERNAMA