The SLSAD was launched in February 2007 to:

       i.  Encourage automotive parts and components manufacturers to rationalise their operations; and,
       ii. Assists companies in:-

• tooling acquisition, development and production;
• productivity improvement; and,
• enhancing export performance.

Eligibility Criteria and Main Features

1. Eligibility:

    i. Companies incorporated under the Companies Act 1965:

• at least 60% equity held by Malaysians;
• possesses a valid business licence;
• in operation for at least 2 years; and,
• registered members of Malaysian Automotive Component Parts Manufacturers Association (MACPMA), PROTON Components and Parts Manufacturers’ Association or PERODUA Vendors Club.

2. Sectors:

    i. Automotive parts and components manufacturing.

3. Financing Amount:

    i.  Rationalisation of Components and Parts Manufacturers
        Minimum : RM500,000.
        Maximum : RM5 million per application.

    ii. Tooling Acquisition, Development & Production
        Minimum : RM500,000.
        Maximum : RM10 million per application.

    iii. Productivity Improvement
        Minimum : RM50,000.
        Maximum : RM500,000 per application.

    iv. Export Enhancement Programme
        Minimum : RM50,000.
        Maximum : RM250,000 per application.

4. Items Eligible For Financing:

    i. Rationalisation of Components and Parts Manufacturers
       Financing for:

• Due diligence exercise.
• Purchase of existing machinery and equipment.
• Related expenses to undertake rationalisation exercises (mergers & acquisitions – M & As) such as registration fees and services undertaken by investment bankers.

    ii. Tooling Acquisition, Development & Production
        Financing for:

• Acquisition of moulds, dies, jigs and fixtures.
• Development of prototypes and system design.
• Product testing and registration.
• Acquisition of new or reconditioned machinery and equipment.*
• Initial patent and industrial design registration / patent and industrial design research.
• Working capital.

*  The age of reconditioned machinery/equipment shall not be more than 5 years old.
    Financing for:
    Existing machinery/equipment, moulds, dies, jigs and fixtures and factory mortgages currently financed by other lending institutions. **

**  a) Companies which are appointed vendors of PROTON and/or PERODUA and which maintain performing accounts with financial institutions are eligible.
      b) Letter of Support from PROTON and/or PERODUA.
      c) For fixed assets acquired in producing components for existing PROTON and/or PERODUA models which were launched not more than 3 years before the date of the                 financing application (“the relevant models”).

    iii. Productivity Improvement
        Financing for:

• Training expenses for TS 16949 and ISO 14001 certification.
• Licensing and technical fees for engineering process improvement.
• Machinery/equipment testing and calibration.
• Manufacturing process layout.

    iv. Export Enhancement Programme
        Financing for:

• Participation in trade exhibitions and missions approved by MATRADE.
• Expenses for overseas sample testing for international standards conformance.
• Market surveys and feasibility studies.

5. Percentage Financing:

• Up to 70% for mergers and acquisitions
• Up to 90% for other eligible items.
• Up to 100% for existing loan principal amounts with other financial institutions (existing machinery / equipment / moulds / dies / jigs / fixtures).
• Up to 90% for factory mortgages.
• Working Capital Financing - Up to 100% for Purchase Revolving Credit and up to 90% for Sales Revolving Credit.

6. Repayment:

• 3 to 7 years including grace period of up to 2 years (except for working capital financing).
• Financing of existing machinery / equipment / moulds / dies / jigs / fixtures - The tenure shall not exceed the commercial production period for the relevant models with a maximum tenure of 5 years with no grace period.
• Financing of factory mortgages - The tenure shall not exceed 12 years including grace period of up to 2 years.
• Working Capital Financing (Purchase Revolving Credit & Sales Revolving Credit) - Up to 150 days for each drawdown including an option to rollover for a period not exceeding 60 days for eligible borrowers.

7. Interest / Profit Rate:

• 4% per annum on yearly rest (SMEs).
• 5% per annum on yearly rest. (Non-SMEs).