Business Term Financing (Secured) is a financing product secured by a charge on an immovable property as a form of collateral against the financing amount approved to the SME.
In the event of a default, the property charged under the financing may be liquidated (subject to the necessary legal proceedings) where its net proceeds (after deducting the cost of such proceedings) will be used to settle the total amount outstanding due to investors.

Business Term Financing is an unsecured product where the SME obtain a one-time financing for working capital or business expansion purposes.

Whereas, Business Term Financing (Secured) is a facility approved to the SME secured by a charge on a property at a margin of financing. The SME has the flexibility to utilise the facility in a single drawdown or multiple drawdowns. An investment note will be issued for each respective drawdown.

The margin of financing, also commonly known as Loan-to-Value, refers to the percentage of the approved facility against the value of the property pledged by the SME.

In general, the margin of financing for Business Term Financing (Secured) will be in the range of 50%-70% depending on the property location, type and the SME’s financial profile. This information will be available on the factsheet.

Funding Societies will engage with a panel of expert valuers to obtain the evaluation of the current market value of the property.

The property can be residential or commercial. Funding Societies will engage with a panel of external lawyers to perform a land search on the property/title. This will ensure that the property is free from any encumbrances before the property is accepted as a collateral.

The charge will be held by Modalku Ventures Sdn Bhd (Funding Societies Malaysia) for and on behalf of investors who have invested in the investment notes issued by the SME (Issuer).

The simple return rate is between 6% - 10% p.a.

Similar to other investment products, the minimum investment amount is RM100 and Investors may invest a maximum of up to 5% of the note’s financing amount.

The tenure is up to 12 months with monthly payment of returns and principal & returns on the last month of the tenure.

Yes. You may refer to the factsheet for the rate of compensation.

Not applicable as this is a facility type financing and there is an option for early payment by Issuer.

15% on returns received.

​Market Risk - The valuation of the property can fluctuate during the note tenure.

​Liquidity Risk - In the case of a default, your principal will likely be held for a longer duration than the initial note tenure.

A note will be considered to be in default when it reaches 90 days past due.

In the event of default, Funding Societies will initiate a recovery process which may involve the issuance of letters of demand, pursuing legal action and obtaining orders for sale with the assistance of the panel of external lawyers.

If the proceeds are lower than the outstanding amount, Funding Societies will continue to take recovery steps from the Issuer and the personal guarantor involved for and on behalf of the investors. This process includes all available and legal recovery actions to ensure the investors' interests are protected.

Any excess amount, after settlement of the outstanding balance, fees, recovery and other costs incurred, will be remitted to the Issuer.

The timeline may vary from months to years - depending on the:

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