The Business Expansion Fund (BEF) was introduced to assist Bumiputera technology based business entities to expand their operations locally and internationally.
The fund offers a combination of equity and loan-based financing.
The equity portion will be offered through the subscription of RCPS (Redeemable Convertible Preference Shares) without any collateral and coupon rate or interest for a period of 5 years.
However, the applicant will be required to pay the full amount together with IRR of 10% at the fifth year or at a time the applicant decided to redeem the RCPS. The loan amount will be raised through participation from commercial banks with MTDC assistance or bank of your choice. The RCPS can also be converted into ordinary shares.
The maximum amount of funding from the equity portion is RM 10 million for local expansion and RM 15 million for international expansion. With the addition of loan-based financing, the fund can finance the business expansion that costs up to RM 30 million to RM 45 million.
The business sectors eligible for BEF must be technology-based and are involved in one of the Priority Technology Clusters identified by MOSTI, which are biotechnology, green technology, oil and gas, electrical and electronics, information and communications technology, nanotechnology and food technology.
The fund is aimed at companies that are at the expansion stage with the minimum revenue of RM 5 million and above. The proposed expansion activities should be capable of showing strong growth potential for the next 5 years.
TERAJU’s TERAS technology-based company would be prioritised.