‘Tackle misconceptions to ease journey for funding’

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KUCHING: Applying and acquiring incentives, grants or funding from the government can be a long and arduous journey due to the stringent requirements and comprehensive application process.

Having reviewed and evaluated countless high impact proposals and projects over the years,it comes as no surprise that many companies – including small and medium enterprises (SMEs) – have misconceptions about the type of funding available and the processes involved in acquiring funding, which can result in a significant cost for the company.

Tackling some of the common misconceptions can go a long way in easing the journey for potential investors, said Datuk Jalilah Baba, chairman of Crewstone International Sdn Bhd.

“Not every company qualifies for funding. This can be a misconception by many international organisations that possibly don’t understand the literature or what they are being told,” she told The Borneo Post in a recent interview.

“There are some key qualifying criteria that potential investors must fulfil in order for their company or project to be given due consideration by the relevant authorities.”

Generally, Jalilah said incentives are given based on the sectors being prioritised by the country and focus on projects or activities that fulfil several criteria, namely: deploy high technology, provide added value, are innovative, sustainable or environmentally-friendly, use highly-skilled workforce and so on.

“One of the main criteria that all authorities tend to look out for is the project or company’s contribution to the country’s economy and value of the proposed project, product or service.

“For example, even though ICT products are considered a priority area, the product must also be of “high value” and bring in significant impact to the country’s economic growth.

“Most of the grants that are approved are usually “matching grants”,” she added.

“The process begins with the company sending in their application for the identified funding or grant, for an amount of, say, RM10 million.

“Should they meet the application criteria, then the authority will typically approve a partial grant for a portion of the amount requested, say RM5 million.”

However, what many SMEs fail to realise is that this approval is still subject to further investigation and auditing – it is not guaranteed that the authority will reimburse 100 per cent of the RM5 million, she added.

“This is a conditional grant or “matching grant”, whereby the authority will only reimburse the said amount should the applicant meet all the stipulated criteria upon implementation or completion of the project.

“Usually, after the applicant/investor has spent the stipulated amount, they are required to submit another application for refund.

“Then an audit is conducted to determine if the company’s spending falls within the qualifying criteria, and as stipulated in their initial project proposal.

“Only if all conditions are met, will the company receive the approved RM5 million.

“Should they fail to meet some of the criteria, then their reimbursement will fall short of that amount or be rejected entirely.

“The same applies to incentives, such as SME Status or tax breaks, whereby the companies are expected to implement the project as proposed.”