As Malaysia continues to transition towards the endemic phase, businesses are seeing an increase in market demand as consumer spending continues to increase in 2022.
As a small business owner, you’re probably over the moon with people ready to spend their hard-earned money and the opportunity to benefit from the pent-up demand. However, just because experts are optimistic about the economic recovery of the country, it doesn’t mean that you don’t need to be prepared for other business risks that lie ahead.
What are the problems that you need to be aware of? Well, we’ve compiled some of the near-term challenges that you might end up facing as a small business owner or small and medium-sized enterprise (SME) and how you can overcome them.
What are the major near-term challenges SMEs face today?
It’s safe to say that if you have a business, you will always need to deal with challenges, whether they are expected or unexpected.
While we can’t say for sure what exactly the problems your specific business might face, we do have an idea of some of the major near-term challenges that should be of concern to your small business today.
1. Rising costs
This is most likely one of the biggest challenges that your small business, or any SMEs, will experience. Factors such as supply chain issues and pricier raw materials due to a weak local currency mean that it will be harder for you to maintain profitability.
And, if you are not able to maintain profitability to keep up with rising costs, then you’ll have to either increase the price of your products and services, reduce your staff count, or do both. And that’s not exactly an ideal situation for a small business.
2. Labour shortage
Aside from the rising costs, another major problem that SMEs face is labour shortage which can lower your operational capacity. Despite an uptick in the economy, you might not be able to keep up with the demand if you don’t have enough people.
This might result in lower profit margins, as some SMEs are facing today because you might have to decline large orders due to an ongoing labour crunch. And if you’re thinking of hiring higher-skill workers to meet the demand, then that will eat into your profits as well.
3. Limited access to legitimate/quick funds
Getting a business loan is generally not easy with most banks requiring detailed paperwork, higher requirements (2 years minimum operation), or might simply take too long to approve.
In fact, a recent survey showed that 40% of SMEs have had their financing applications rejected in the last six months. A major factor that was cited in the survey findings was that most business owners lack collateral to obtain financing and ended up using their personal funds to grow their business.
How do you finance growth and overcome these challenges ahead?
Having a strategy to combat the near-term challenges will help you during these trying times, but more importantly, you need to manage your finances so that you can ride out any storms that your small business may encounter.
Rising costs, labour shortages and high inflation may mean that your business will need access to more credit lines to continue to grow. The recent hikes in the Overnight Policy Rate (OPR) will also have an impact on businesses trying to secure financing.
How do you get access to extra working capital that your business will need in the near term?
Alliance Bank has the right solution to support SMEs’ growth in this challenging economy. As a customer of Alliance Bank, you can gain access to convenient financing and business solutions to improve and streamline your business operations, reach more customers to generate more revenue and upskill your team through BizSmart® Solutions.
Here are the key benefits of Alliance Digital SME:
- From RM20,000 and up to RM500,000 collateral-free financing
- Simple, fast, and convenient digital application
- Only one documentation is required for processing
- Fast application via online channels
- Convenient process with no physical visits to the Bank required
- Access to value-added business solutions via the BizSmart® Solution portal
As for the requirements needed to apply for Alliance Digital SME financing, all you need is to be at least 1 year in business and have a minimum annual sales turnover of RM50,000.
If you’re a startup and have just recently started, you can go ahead and apply for Alliance Bank’s business current account here.
Boost your business growth with Alliance Digital SME in 3 simple steps
If you’re ready to get the financial boost that your small business needs, then all you have to do is follow these 3 simple steps to apply for Alliance Digital SME loans:
Step 1: Head to the Alliance Digital SME website here and complete the web form. (First, check that you’ve met the requirements and that your business qualifies for financing.)
Step 2: Upload the latest 6 months’ company bank statements along with your NRIC. (Additional documents might be requested, subject to the Bank’s discretion).
Step 3: If your application is shortlisted, you’ll need to do a virtual interview.
And that’s it! Once you passed the virtual interview, all you need to do is accept the Bank’s offer and you’re on your way to additional cash flow for your business.
Need more information on Alliance Digital SME? Head over to their page here for SME financing or here to open a Business Current Account. Check out the Bank’s BizSmart® Solution page here if you’re looking for exclusive partners’ offerings to support and grow your business.
