Bank Negara Malaysia (BNM) recently launched this Business Recapitalisation Facility (BRF) to support SMEs to recover and grow, while managing their level of indebtedness through innovative financing solutions.

Under BRF, SMEs may obtain either – equity financing through the issuance of preference shares, ordinary shares or any suitable equity-like instruments, or- a mix of debt financing and equity financing. BRF may be used for capital expenditure and/or working capital but NOT for refinancing existing credit facilities.

Participating financial institutions, particularly the Development Financial Institutions, may either offer:

(a) financing in the form of equity, or;

(b) debt financing combined with equity in partnership with third-party equity financiers (blended finance).

The RM1 billion Facility is available from 3 February 2022 until full utilisation.

Objective	To support SMEs to recover and grow, while managing their level of indebtedness1 through innovative financing solutions
Size	RM1 billion
Eligibility criteria	Viable Malaysian-owned SMEs2 including micro enterprises from all economic sectors
Purpose of financing	Working capital and/or capital expenditure
Tenure	Up to 10 years
Financing size per SME	Up to RM5 million
Financing rate to SMEs	The maximum effective rate is up 5.0% p.a., inclusive of guarantee fee or 3.5% p.a. without guarantee; no cap on return for equity investment
Type of facility	SMEs can either obtain: ∙Equity financing through the issuance of preference shares, common shares, or any suitable equity-like instruments; or ∙A mix of debt financing from participating financial institutions (PFIs) and equity financing through third-party equity financiers (blended finance).
Availability	3 February 2022 until full utilisation
Application procedure	Application for equity financing or blended financing can be submitted to PFIs and approval will be subjected to the credit assessment of PFIs and/or relevant third party equity investors

Read more details here.