Nowadays, applying for loan is never as easy as last few years time. We are having hard time accepting rejection, crushed and demotivated to continue purchasing our dream houses. So this is just a sharing, how we could prepare ourselves to get our loan approve.

(For people who owns business or starting their own business)
Every bank has their own appetite and each of their requirement will be different. Here I will give you few tips where every bank will definitely accept your loan without you delaying to get other documents done...


1. Already had sdn bhd business more than 2 years.

a) Remember to register your company under SSM.
b) Pay income tax Form B, be a good citizen.
c) Remember, if you pay tax. Try to pay PCB with your own account and not through your accountant company account. Trust me, this will save you alot alot of time and complexity when applying loan.
Bank will need the following documents

a. Your SSM registered cert >2 years
b. Income tax Form B
c. Your company bank statements

You are all set.


2. What if my company is less than 2 years or I work as a freelance.

a) Register a company with SSM
b) Open company bank current account
c) Register your company under KWSP
d) Contribute a fixed salary to yourself, lets'say RM6000 as your salary. Credit the amount monthly consistently form your company bank current account to your personal bank account. This will create a proper employee income proof.
e) Contribute KWSP to yourself, deduct 11% from your Rm6000 INCOME and 13% contributions from your own company.
(Bank will need to look at EPF and Bank statement credited salary as a proof of income)
f) Create your own payslips.
Now you can apply loan as an employee of your own company. Bank will need to look at you Payslips, bank statement with RM6000 credited monthly, EPF shows 11% and 13% contributed for your Rm6000 income.
This will be sufficient to apply loan.


Q&A
-----------------------------------------------------------------------------------
Why I can't use my company tax BE form or Company bank statement to apply for loan?
--- Because bank wouldn't look at company with SSM registered less than 2 years. That's why it is hard for people who just established company to apply for loan if they didn't prepare as I stated as above---
----------------------------------------------------------------------------------
Why I work as hawker and credit a monthly fixed income into my own account. Still, bank wouldn't accept my loan?
---Because your income doesn't shows where it comes from, bank view this as a very vague income proof. Bank will wonder where your income comes from, even you show him picture of you goreng chay kuew teow, it is not enough. They wouldn't accept your loan as you could be a syndicate crediting your income from drugs money.
Bank is a simple minded creature, all they need is a solid document to show them. Just follow point no.2 and you can apply loan easily. No matter you are a hawker, a freelancer, someone who earn a living from money dropping from skies or had a goose that lays gold egg. No problemo.-----
----------------------------------------------------------------------------------
Why bank wouldn't accept my loan when I have my company registered under SSM for 1.5 year and my company profit is very solid and strong. Moreover I am a responsible citizen who pays tax!!??
--- First of all, bank is quite cocky. They want to be insured that your business is strong and solid and not crumble when wind blows, company established more than 2 years will make them believe so.......lol.... anyway, bank will only accept loan application through your company income and profit if given your company has established for 2 years or more.
Other solution? Buy a empty shell company established more than 2 years old, with transaction in their bank statement...... this is not encourageable... but oh well.. -------
---------------------------------------------------------------------------------

The end
Anonymous writer.

Any other good suggestions or ideas, do present it out. This is and open ended discussion.

This post has been edited by Madgeniusfigo: Oct 10 2015, 12:31 AM

Good advise bro....tq

Pretty much the exact thing i would advise as a banker

Yes, at least some guideline there. Some people just didn't get prepared. When time to purchase house, they couldn't apply loan because lack of some important document.

Next, I will write about ways for employee to secure loan easily....
or
any ideas?

nice advice

Good sharing. And 1more. Vastly experienced bankers is a must, as they are "flexible" enough to ensure yr application successful. Try avoid those who just follow rules.

Hope it helps you.

BTW, don't do it with Sole prop. it will backfired.

True, but try not to extend of forgery

Guys, my new article for working class group to secure loan

https://forum.lowyat.net/index.php?showtopic=3742369

go through all the hassle and buta buta pay LHDN another rm 7500.

Good job to waste rm7500 just to get u entitle for a rm 450k loan max.

Hi,

Thanks for the tips. Just curious for income as freelance. What if I have a parttime business, registered as an enterprise under SSM (ROB) and have been in business for almost 3 years, with solid bank statement for the registered entity, will that qualify as side income? At least to top up my full time job income.

In my case, I'm provide consultancy services on system development and programming. Money comes in once or twice per month only but consistent every month. Average amount monthly around 3K.

Thanks.

Dear MOSFET,

1. Yes, it is qualified. Derivation of income amount depends on your latest 6 months credit balance

2. Is ur 3k income credited into your bank statement via cheque clearance?
Income inconsistence will be considered as variable income, whereby need 6 months of the income for average calculation.
Money collected multiple time in a month, this won't be a problem, just need to explain to bank your business nature and how your income are collected.

3. If 1st and 2nd is solid. Both income can add together.

Hi Madgeniusfigo,
can you pls explain why sole prop. will backfired? what can a sole prop. do to secure a loan?

hope to hear from you soon, cheers.

Dear,

Simple
1. Sole prop doesn't need auditing, the salary declared to himself will be a fallacy and no justification. Hence only bank statement comapny can justify its income.


The rest I will email you, it's not appropriate to write it out here.

do we need to pay to register a company under SSM?

i am a freelancer, i can just create any kind of company?

Dear,

1. Usually if sdn bhd, most of the people will pay 3rd party to help set up the Sdn BHd. You can also do it yourself

And yes, there's fees to set up company, registration fees stamp fees and so on.

2. You can set up Sole prop, LLP or SSM

3. LLP and SSM would be the best.

4. If it's only you, then set up sole prop.

Cheers

thanks for your reply

is this what they mean shell company? i can set up a company doing something unrelated to my works and it is ok?

My advice is you better speak to a company secretary or public accountant to plan yr biz venture...and get all the info u required.

Too much to write here.

Do you need ea and income tax?

still on this topic? LHDN and banks very smart nowaday

end of day.
it is about ability to pay back.

Solid advice. I wonder how newly start ups / business (stabilizing) would fair in their loan application without few years of track record to back it up.

1. Well, usually bank will accept company income with SSM>2 years, so buying a shell company with SSM establishment >2 years will be logical.

2. technically, starting your own business with legit business operation isn't consider a shell company.

Cheers

Any good recommendation?

Dear

1. It's best to pay income tax for company or as an individual too.

2. You can get loan without paying tax...(* not recommended*) Hwoever, it will minimized the No. of banks that can finance you the loan

Cheers

True


Dear,

1. Hence the income to bank isn't solid and it will be subject approval.

2. Freelancer who doesn't have company set up, they can proof their income from the payment from the project, evidence of their operation, payment voucher, nature of business.

3. My advise written here is to mitigate the subject approval and to solidify your income evidence, so that easier for your loan to approved in the future!

jm5c

CHeers

I have a business that incomes come in on the first week of the month. If I bank in the money into the company account on the first week (5th maybe). Could I pay the salary to myself on the 7th?

And if I bank in 8k, and pay salary of 8k to myself. Is it still acceptable?

Thanks and sorry to bump old post.

Hi, so this means sole prop is impossible to get loan?

Is a must to register sdn bhd?

Thanks

Kasi B form, kasi e lejar prove "baki cukai"=0, no tunggakan.

EDITED.

This post has been edited by heavensea: Mar 6 2017, 08:33 AM

Usually sole prop harder to get loans, but won't say it's impossible if your business is really making profit.

After all, bank only cares about getting their monies back in the end.

If you can show you're making good money, usually they are rather willing to approve your application.

Not sure if they changed anything recently thou.

Baki Cukai = 0 does not mean you're capable to repay the banks for the loans or you're making money with your business.

In fact, I doubt any bank will offer you a loan without having a look at your bank statements

If Ada, then a lot of people can open sole prop and borrow already

I thought it's most about how much tax to pay as this indicated the earnings level.

The same reason why people dun take the Form B and EPF statement solely to judge the level of income obtained by a person.

It has to be usually backed up with payslip/payment voucher/bank in records to show that you actually receive those monies instead of having paper income.

Gotcha, need few relevance documents to prove the earnings is valid.

Dear Daveliew,


1. Your company must be registeres SSM >2years. then only the 6 months bank statement income will be verify validate.

Dear tanshaoya,

1. SOle prop won't be a problem, just that your business credit income must be good for the 6 months, and as said, 2 years of SSM registered.

2. ONly sdn bhd and LLC can get salary and validate as income from bank pov.

Bank statement is a must, as business, bank statement is their lifeline. hence you are right!


U r right!

Thanks for your reply, may I know what is LLC?

It's called limited liability company

There are few types of business company you can set up:

1. Sole proprietorship
2. Partnership
3. SDN BHD
4. Limited Liability Partnership


Limited Liability Partnership is quite new in Malaysia and has been around since 2012, so it's not fairly heard before, but presently it's the most opt for option. It's the cheapest, safest in terms of business terms protection and easiest to operate for new startup.

Sole Prop
- Sole purpose is for people with business under his own very name. But the company is directly interwine with the owner assets. So if any lawsuits charge to your company successfully, your debt payable will have no boundary, you would need to fork out your own personal assets, cash to pay off the company debts. Hence, anything happen to the company, you will be bankrupted.

- No shares allocation

Partnership
- Same as Sole Prop, just that you have another partner to share the responsibility with.

SDN BHD
- You can have multiple shareholders as this company will have shares allocations, you can transfer shares around director.

- It is much more costly, as you need to pay below profession to keep your company afloat with Malaysia guideline and policy.

Company Secretary – to organise AGM & submission of annual return to SSM (RM1,100)

Tax agent – to compute the tax figures & submission of form C to LHDN (Inland Revenue Board) RM1,200

Auditors – to conduct audit on the management accounts & prepare audited financial statements. RM1,500

Account person – to prepare full set management accounts for audit purposes RM1,800Total estimation = RM5,600

The reason I choose LLP is therefore I am a cheapskate who doesn't wish to pay too much to establish my own startup company =P. Moreover, LLP is a seperate legal entity which protect my own personal assets. When my LLP company been sued or bankrupt, creditors cannot come after me. But for sole prop and partnership, creditor can come after you and they will hunt you down definitely.

Having LLP save me lots of cost, I don't need to submit audit to the government yearly.

- RM500 to register your company
- RM40 Certificate fees
- RM15 stamping on certificate fees

Total cost RM555

LLP only requires a secretary which the director can be appointed as one. And the company can be set up in just few days, superbly easy!

I had just recently set up my own company "Fintech LLP",

Good info, thanks. I am a freelancer, so the cheapest option for me is llp I guess.

It depends.

Different company holds different value.

If you are a startup, sdn bhd in malaysia is more valuable, as it is more accountable and credible. Hence crowdfunder would more than likely invest in such company registered.

It depends which type of company suits you.

Cheers

HI there, just wondering is that you meant to do it your own for the income tax submission is better than hand over to account/taxation firm?

My company just ran for 1 yrs + and is enterprise.

Another things is if i am freelancer that claim commission without any basic. but running a company that at the moment didnt pay any salary to my own how to submit the income tax? i understand that the income tax shall combined personal and company together using B form. so it that measn that for example my comission from other job get rm 40k per year n company didnt pay me any so in the B form i declare myself earning rm40k pper year?

Could you advise.

Thank you.

Regards,
Ng

As one could estimate gloss profit from GST payments. Any company not paying GST is deemed small and unreliable.

Hi tanshaoya,

I've successfully applied for my home loan via my enterprise company (non-gst). However the approved amount was 80% with a higher interest rate of 4.65% rather than +/- 4.35%.

As you're a sole proprietor, your income tax form, 6 months bank statement, and latest cash amount will play a big role for the approval. They will look at your company's cashflow and how much you paid for your income tax. No salary slip needed or required.

Another thing to take note is that, it is very unlikely for other banks to approve your loan besides the bank which your company is being registered with (as they have all your transaction records). I've tried other banks and they doesn't seem to be bothered with my application.

Hope this helps!

This post has been edited by kanz1986: Mar 10 2017, 11:21 AM

1. Where does you claim this "commission"? from your own company or other business partner? If from own company, you need to declare as your income in borang B.

2. Your total taxable income will be: (Total Company Revenue - Company Expenses) + commission that declared to your self.

Am property agent. So commission from there my agency not from own company. So if that so, i still need to declare in borang B right?

Thank you.

If it is from your agency then that will be part of your salary income, and should not reported as business income. In this case you declare as borang BE only.

Unless you have a sole proprietor registered under you, then all the business income that linked to this company will be declared under borang B. You need to differentiate business income and salary income, if you have both, then just declare in borang B.

I know some insurance agent declare their commission as business income.

This post has been edited by kelchai: Mar 10 2017, 04:24 PM

Thanks for ur explaination then i guess I will stick with boring b as I got both personal income n biz income.

Thank you so helpful.

Regards

Dear nwjeng,

1. if you settle your tax yourself with strong taxation knowledge, then it's best to handle it urself. However, it is opportunity cost using your time spending on accounting and taxation. It saves you cost to do it yourself, however, using expert service would save you time and error.

2. if it's a sdn bhd, usually form BE as sdn bhd has share

3. if your company is with sole prop , hence it wil fall under form BE , as company tax. people would prefer to be

Personal tax

RM100K = 11.9%
RM200K 24%
RM200K> 24.5%

COMPANY
DIRECTOR FEES RM100K =11.9%
0-RM400K 19%
>RM400K =RM 24%

you can see the tax bracket different

moreover, epf have tax deductible 19%. benefits.

4. You declare to tax your receivable income

I am not a tax expert, but hope it helps

Cheers

(Y) (Y) (Y)

Dear

1. true for most part

2. MOst of the bank can proceed with company application.

just provide your statement to the bank that you wish to apply with

certain bank would required more doc to prove the business income validation

example > 2 years B form tax doc

3. well, it could be your doc is not strong , banker lazy to proceed with it as they doesn't know how to do it or they have too many cases. etc

Chhers

This post has been edited by Madgeniusfigo: Mar 10 2017, 08:16 PM

Yup.

however, as property agent, you can just apply your personal commission income to bank with business income

important is ssm must registerd > 2 years, for business income verification

Cheers

Yeah, some agent up to GSM USM, have their own insurance company, would go for BORANG B, as for lower tax bracket!

but usually normal agent, they would jsut declare personal tax.

hmmm, not to be confused, Sole Prop still fill in Borang B, Borang BE is no business income, Borang P is for partnership.

tq for the correction, you are right.

typo

Guys,

What I still don't understand is that. For LLP and sole propietership, what is the address I should put in when I register it at the ssm office?

Can it be a house address? As shop lots cost a bomb.

Dear

Yes you can put your houseaddress if it'sa home office whereby your operation all located inside your office.
just need to explain to the bank your profession industry and how does your business work without an office but a home office.

Cheers

I have just started working for a company located and registered in USA. I work remotely from Malaysia.
The company is not registered in Malaysia nor has a bank account in Malaysia.

I will get paid through PayPal every month and then I withdraw it into my bank account here.
So, the payment will be credited from PayPal.
There's no payslip.

Does it mean I'm employed or self-employed? Since the company is not registered in Malaysia and I work remotely from here.

If I'm employed, what documents do I need to provide if says I want to do a house/car loan?
Since the company is not present in Malaysia.

If self-employed, am I required to register an Enterprise (sole prop) and have a business current account?
And then credit the salary from my business account into personal account?

Great post! Thanks a lot. Very helpful for business owners. Should sticky imo.

UPPPP! This thread is mega helpful.
I have the exact same question. Anyone knows about this?

OP have you found the answer yet?

Want to ask also on this matter,

I work remotely for a UK based company and my salary has been paid via their contracted agent/dealer that also does my EPF and PAYE.

From April onward my position becomes a regional position and salary will no longer being paid by the dealer but paid in UK into a UK bank account and will be subject to all UK taxes and National Insurance. Most likely won't meet the 180 days residency requirements to be taxed as a Malaysia resident.

Currently have an impeccable credit record with HSBC and SCB, never had any dealing with any other bank other than 2 car loans with MBB. Basically if I need a mortgage for a property all I have to do is reach for my phone and contact either of my bankers and they will sort it out for me.

What are my options?

We are planning on buying a property for investment and another as our home.

Been told best to just close the deal before April but it will mean needing to rush through for both of it. The other option is I could use my missus' name who will have a Malaysian income but that leads to another set of problems as she is a foreign national.

well, support use misstress name. just married her and she will convert to citizen in short time

Both hsbc and scb are experienced to deal with expat. as long as they are convinced, you are not on short term contract, don't see much issue to obtain housing loan.

We are already married

Citizen? She will never give up her citizenship and I'd never allow her to, not for this country anyway.

adui.. that call wife already, not misstress. married already still got problem ah? this country law so troublesome

If subjected to UK tax, then not subjected to MY tax lo. Won't double tax. Unless payment from MY.

I think you can use your UK tax to proof your income for local mortgage.

Say I have been taking fixed income with payslips and epf from my own company,

Does bank still look at the consistency of transaction on my company account? Say my kind of business only get payment every 3-4 months but still I am paying myself consistently every month as the amount is sufficient, does that works?

U need to decide whether to apply loan as an employee (payslip and personal bank account statement reflecting ur salary credit into that account) or as a business owner (6 mth company bank statement, BE form and income tax pymt slip)

Don't mix up both

great post and good sharing for those self-employed to justify their income. bank only give loan for those proper income document such as income tax, 6 month company bank statement.

Will have to check with my banker on this. Both on holiday right now.

Either you need a pair of reading glasses or didn't know missus = mrs = wife

She still needs a permit to work here and must renew every year.

That's good to know.

Thanks bro, very good advise.

Hello everyone,

our situation is quite difficult. We want to get a car loan - my wife is working as a contracted employee and also running a sole proprietorship. we registered SSM (more than 2 years ago) and opened current account. our company has only one client, from Germany, with partnership contract and fixed income of 11k a month. (remotely working for a german based company)

The bank told us now that they only use 10 % of the income for their calculation, so instead of 11k the base is only 1k. so we are getting rejected. What can we do to bring in the full 11k? it is very frustrating, we could easily afford a mercedes but we can not get a loan for a perodua coz they are using only 10 % for their calculation.

hope to get any ideas from you guys

Does yr german co pays you guys promptly each and every month and accordance to contract?

yes, they pay us promptly every month and the beginning of the month

What partnership business is that? Automotive?

Thank you boss... More tips on freelancer..

Then need to pay twice the tax? For company or individual? How does these works?

Yes bank will only use 10% based on bank statement depending on which industry you are in.

Some 20% i think..

hi if i work as a hawker i should register a ssm and open a current account. everyday bank in the profit money to the company account? and monthly pay to myself by bank transfer? and print payslip to loan?

Many people already suggested that if I have a sole prop than I need to pay a salary every month to myself, pay EPF, PCB etc and than I can apply with the salary slips. Is this a proper way to solve the problem? will the bank accept the documents for a loan?

Hi everyone. I have a bit of a problem and didn’t know where else to turn to. Hope some of u guys more experienced can help me out.

Basically I plan on taking out an education loan from a reputable organization (it’s not a bank). The loan requires me to have a co-applicant AND guarantor. Both have to earn a certain amount in order to qualify. The thing is, due to various reasons, I cannot ask help from any close family members because they either don’t earn the monthly income needed or they just refuse to. Toxic people.

Very uncommon issue but here is where it gets complicated. I think I’ve found a guarantor that’s willing to help me out but I’ve ran out of options for a co-applicant. Actually I currently work for a legit German-based company as a remote contractor. I started working for them at the beginning of the year and I earn enough to meet the income needed for a loan co-applicant. They pay me every month through PayPal.

I have a very close cousin that genuinely wants to help me out but he is my age, is a student and doesn’t have a stable job. We were actualy thinking of actually making him my co-applicant.. the way we will do this is open up a sole-proprietorship under his name (so it’s like self-employed), he’ll open up a current account, contribute to his epf as self-contribution monthly, and I will bear the costs by banking in the income I earn in into his current account so the bank statements match.

The monthly amount that we will be passing off as his “income” is slightly above the minimum amount required to file income tax at L/HDN. Would this work? I plan to do this starting October because I will be applying for the loan by middle of next year. How would I go about filing the taxes (that would be under his name)/borang BE?


Thank u everyone i appreciate any advice!

Why require co-spplicant ? Guarantor i can undrrstand.

You need to borrow and have to find another borrower too !

I'm not sure but those are the rules. A co-applicant is required PLUS a guarantor. I dont know if I can find another person to vouch for my case, all my frends are college students and my other family members won't or can't

My advise is be careful with such lender and do they have any lending licence from BNM ?

thank you for ur response! yes they are legit it's k*jadi education loan. i dont want to take a bank loan as a majority of them require guarantors to be immediate family members and a guarantor with a sole prop (aka my plan w my cousin) would have to be in business for at least 2 years, both of which i dont have access to so i really donno

Thought they are suppose to help poor student and yet they are making things difficult ... sure you understand right? Is it stated in the application form ?

This post has been edited by mini orchard: Jul 24 2020, 06:10 AM

ya i agree it's definitely inconvenient. i asked them personally and thru email and it's required

All this just to get an education loan? Better find some other way, do you have any employee benefit that gives out education loan?

i know it sounds like a lot of work but i have kinda ran out of options. just planning to fund my final year. ptptn isn't an option either

regarding the employee benefits, i highly doubt they'd have that since i'm working remotely and i'm not a german national

Why don’t you work for a few more years before enrolling? Or pay the education loan in instalments. I’m sure they allow that

Dear Madgenius,
Now is year 2022, I'm hope not to late to discuss some financial loan status...


My question is, if I'm a freelancer and my income are not sustainable but pass 2 year even I declare my income tax but not achievable on tax and yet I'm serving my previous commitment loan at RM 800k, as my CCRIS / CTOS scoring are excellent,

Do I still qualify to apply hire purchase loan amount at for example RM 40k - 50k ?
A simple question, how banker calculated my DSR according my income tax for 2 year report?

Hopefully u may advise me on this, as I'm really curious to learn more...
Tqtq 🙏

How much is the monthly repayment for 800k loan ?