Business Start-Up Fund (BSF)
Funds early-stage Malaysian technology companies with interest-free convertible notes and a grace period before repayment.
The Business Start-Up Fund (BSF) is an early-stage financing programme administered by the Malaysian Technology Development Corporation (MTDC) that provides flexible convertible instruments to technology-based Malaysian companies raising their first institutional capital. The maximum investment is RM 5 million or 90 percent of total project costs, whichever is lower. The primary instrument is an interest-free Convertible Promissory Note (CPN) carrying an option to convert into Redeemable Convertible Preference Shares (RCPS), or alternatively Preference Shares. Repayment terms include an 18-month grace period followed by a five-year repayment tenure, providing early-stage companies meaningful runway before cash outflows begin.
Eligibility requires incorporation under Malaysia's Companies Act 2016, a technology-based business focus, and minimum 51 percent Malaysian ownership. Unlike BGF (which requires RM 1.5 million in revenue), BSF explicitly targets companies at an earlier stage — those that may not yet be revenue-positive but have a viable technology product or prototype and a credible growth plan. MTDC's BSF sectors align with its broader six-cluster strategy: Semiconductors and Electronics, 4IR, Healthcare and Life Sciences, Food Security, Green Economy, and Aerospace and Mobility. Applications are submitted via pitching.mtdc.com.my on a rolling basis with no fixed annual deadline.
BSF is a convertible financing instrument, not a grant — principal is ultimately repayable or converts to equity. MTDC brings strategic value beyond capital, providing portfolio companies with access to MTDC's industry network, mentorship, and commercialisation support. For founders, the interest-free structure and 18-month grace period are the key economic advantages compared to commercial bank loans, and the CPN structure defers valuation negotiation to a future priced round. MTDC's office is located at Menara Yayasan Tun Razak, Jalan Bukit Bintang, Kuala Lumpur; general enquiries can be directed to commsadmin@mtdc.com.my or +603-2172 6000.
Interest-free convertible notes up to RM 5 million (or 90% of project costs) for early-stage Malaysian technology companies, with an 18-month grace period before a five-year repayment term.
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