Frequently Asked Questions

General

We provide working capital financing to companies who have been awarded contracts or projects by the government or its agencies, statutory bodies and GLCs (e.g. Tenaga Nasional Berhad, Telekom Malaysia Berhad, and Petronas).

Services that we offer include:

  • Notification of Bai’ Ad Dayn Factoring
  • Confirming Facility (Letter of Credits)
  • Al-Kafalah Bank/Financial Guarantee
  • Letter of Support
  • We also offer end-to-end services of contract finance, from tender stage until delivery of products to the government.

Firstly, factoring’s flexibility and effectiveness as a financing instrument is increasingly accepted by the Malaysian business community at large and is seen as an alternative to traditional banking facilities. Secondly, the continuous growth of Malaysia’s economy has encouraged more business opportunities, particularly for the SMEs, which factoring is tailored for them in the first place.

It must be appreciated and further emphasized that factoring is a simple financing tool which can be applied as long as there is a creation of unencumbered debt. Factoring is increasingly seen as an alternative source of financing, as well as an improved means of working capital management. A factoring facility is able to strategically assist companies, particularly the SMEs, in expanding their business. However, more often than not, such businesses are either thinly capitalized or do not have strong support in terms fixed assets. As such, traditional bankers are normally reluctant and would only extend limited working capital facilities to these businesses.

On the other hand, factoring companies play the role of progressive financiers, filling in the gap that traditional bankers are not able to fulfil by providing SMEs easier access to working capital facilities.  

Bank loans are very restrictive in nature and almost not geared to a company’s sales growth.

A credit limit granted today would only be good for past sales. Any new contracts secured would need a lengthy evaluation and, in most cases, would require settlement of existing loan prior to granting of a new loan.

Credit challenges with CTOS /CCRIS / RAM BASIS such as unpaid credit cards, hire-purchase or housing loan would almost automatically demerit business owners, even though the amount may be small compared to the contracts secured. It is a known fact government contracts are irregular, and during such difficult times personal debts may occur. With directors and owners having these credit reporting agencies problems, banks would almost automatically reject the company’s loan application.

On the other hand, factoring companies play the role of progressive financiers, filling in the gap that traditional bankers are not able to fulfil by providing SMEs easier access to working capital facilities.

About IFSB

Yes. Ikhtiar Factoring Sdn Bhd (IFSB) was incorporated on 13 March 2000 to carry out the business of domestic, export and import factoring and equipment leasing. Bank Negara Malaysia (BNM) classified us as a Non-Bank Financial Institution (NBFI); and on 27 April 2000, approved us to operate as a scheduled institution under Section 21(1) of the Banking and Financial Institutions Act (BAFIA) 1989. BAFIA has since been repealed and replaced with the Financial Services Act 2013.

We are a specialist factoring company concentrating in the factoring finance of government or government owned companies’ contracts/procurements receivables. All its factoring business is derived wholly from the factoring finance of clients that have obtained contracts from government or GLCs (such as Petronas, Tenaga Malaysia Berhad, Telekom Malaysia and etc.)

In compliance with the Ministry of Finance (MOF) SPP Bil 10/95, IFSB was approved and accredited by MOF on 14 June 2000 to engage in the factoring finance of government or GLCs contracts and procurements.

With decades of experience serving companies in a range of industries and solutions, we have the know-how to be the right choice for factoring. We offer creative factoring solutions tailored to meet your specific needs. Our rates are competitive with flexible terms, and initial approval process is fast.

Our team of experienced and dedicated finance specialists can advise and provide you with access to the best funding solutions for your business.

Trade finance (Letter of Credit/ Performance Guarantee) form an integral and important structure on contract financing offered to clients for its supply contracts. The absence of trade finance from the structure will not fulfil the contract financing requirements — especially if it involves an overseas supplier and, in most cases, domestic product suppliers too. At IFSB, we have the necessary expertise and offer trade finance services to help companies meet the performance requirements of government procurements contract financing.

Through our full spectrum of factoring finance solutions, we can resolve our client’s financial challenges and alleviate their needs to secure trade finance facility from the bank independently, where barrier and limitations to secure the facility by the clients on its own is very high.

We are approved and accredited by the Ministry of Finance to engage in the factoring finance of government or GLCs contracts and procurements, this means that we can issue our own performance guarantee and clients are no longer dependent upon traditional bankers to issue the BG.

Throughout the years, IFSB has grown to become the premier factoring finance company in Malaysia to offer products and services similar to the banks’ trade finance offering, but minus the hassle of bureaucratic application process. It is this competitive advantage that made us a progressive leader in the industry. The business community, especially the bumiputra companies, appreciates us for extending a lifeline to them when the banks could no longer support and cater to their financial needs.

Ikhtiar Factoring Sdn Bhd (IFSB) commenced business in the year 2000.

Fees and Costs

We offer creative factoring solutions tailored to meet your specific needs. Our rates are competitive with flexible terms, and initial approval process is fast. Our team of experienced and dedicated finance specialists can advise and provide you with access to the best funding solutions for your business.

IFSB offers creative factoring solutions tailored to meet your specific needs. Our rates are comparatively the lowest in Malaysia with flexible terms, and initial approval process is less bureaucratic and fast.

We also offer an exclusive program, Duit Tak Putus, which is a unique payment scheme that has been customised to be Syariah-compliant.  Under its special ‘AM/PM’ system, approved companies that submit their claim invoice in the morning, will receive the payment by end of the day (subject to completion of all documents submitted, terms and conditions apply).

We take an average of seven working days to process and update you on your application status. Issuance of Trade Finance average up to three working days.

No, there are no hidden fees. Any charges and fees would be made transparent upfront.

Yes, our factoring fee is a flat rate.

Application

You are eligible to apply as long as you have secured a government procurement contract, or are in the midst of tendering and securing one.

Depending on which services that you would be engaging with us, you would need to prepare the following documents:

  1. Certified copy of Memorandum and Article of Association (for limited company), or Business Registration (for sole proprietorship / partnership).
  2. Certified copy of Form 24 and Form 49.
  3. Company profile, with attachments of the company’s directors and management personnel’s resume or CV.
  4. Photocopy IC (front and back) of all company directors and shareholders.
  5. Original copy of the contract/purchase order.
  6. A copy of the supplier’s quotation or pro forma invoice, and the relevant catalogue for the products contracted (if applicable).
  7. Company’s audited accounts for the past three years (if applicable).
  8. Company’s bank statements for the past three months.
  9. Copy of registration certificate with the Ministry of Finance.
  10. Copies of current and existing banking facilities (i.e. OD, term loans, LCTR, BG offer letters).

*B&G not needed for enterprise companies.

Note that approval is subjected to all relevant documents submitted to us and at IFSB’s final discretion. Terms and conditions apply.

 

On average, it would take three to five working days for us to process the application and give approval. Note that approval is subjected to all relevant documents submitted to us and at IFSB’s final discretion. Terms and conditions apply.

Under IFSB’s special ‘AM/PM’ system, approved companies that submit their claim invoice in the morning, will receive the payment by end of the day (subject to completion of all documents submitted, terms and conditions apply).

Customers Related

Yes, we will verify with an identifiable personnel or relevant department responsible for the procurement contract, such as Kewangan and Perolehan, e-Perolehan system, Suppliers and other stakeholders.

Customers can send payment through e-Perolehan. We will request for acknowledgement of Arahan Pembayaran (Notice of Assignment) as per Ministry of Finance format prepared under the client’s letterhead. The Arahan Pembayaran will indicate payment instructions made to IFSB’s account.