For a factory, warehouse or other industrial property, Malaysian banks whose pages or product sheets name industrial property publish maximum margins of 80% to 95% on the property itself (OCBC lends companies up to 140%, CIMB 150% with working capital) and tenures of 20 to 25 years, inside Bank Negara's 35-year cap. For a Sdn Bhd, they ask for directors' ICs, a board resolution, SSM forms, three years' accounts, six months' bank statements, and the sale agreement and title.
What margin of financing do banks give on a factory loan?
Banks whose pages or product sheets name factories or industrial property publish maximum margins of 80% to 95% on the property itself (OCBC lends companies up to 140%, CIMB 150% with working capital).
Maximum margin each bank publishes
Pages or product sheets that name factories or industrial property
Pages that name only business or commercial property: ask the bank if it covers a factory
- Bank Muamalat: completed standard light industrial factories and warehouses in industrial areas, not special-purpose ones; total capped at 105% of the lower of valuation and price.
- CIMB also lists vacant land: ask what margin applies to land.
- Not only banks: in August 2026 MIDF said it had provided RM13.4 million in Islamic financing, under its Soft Financing Scheme for Automation and Modernisation (SFSAMi), towards a RM14.896 million factory purchase in Klang.
How long can a factory loan run?
Banks whose pages or product sheets name factories or industrial property publish maximum tenures of 20 to 25 years, inside Bank Negara's 35-year cap.
Maximum tenure
Pages or product sheets that name factories or industrial property
Pages that name only business or commercial property: ask the bank if it covers a factory
RHB's BizPower: up to 25 years “depending on the type of property”.
Some banks will not finance leasehold below a certain balance tenure: see leasehold factories.
Does it matter whether a company or a person borrows?
Whether a company, a sole proprietor or partnership, or an individual borrows changes the product, loan size, guarantees and age limit.
Sdn Bhd
- Guarantee
- Directors (RHB, Standard Chartered, Bank Islam); Bank Islam adds shareholders over 30%.
- Size
- Up to RM5 million on Bank Islam's Biz Smart; RM10 million at RHB BizPower and Hong Leong.
Sole proprietor or partnership
- Size
- Up to RM3 million on Bank Islam's Biz Smart.
- Age
- Bank Islam's Biz Smart ends when the key promoter or guarantor reaches 65 (20 years at most).
Individual
- OCBC
- Malaysians over 18, for their own business use: up to 85% or RM4 million.
- RHB
- Commercial property: 85% plus 10% for MRTA; 30 years or to age 70.
- Years in business: RHB 2; Alliance and Standard Chartered 3; Bank Islam 3 for manufacturing, trade and logistics, 5 for construction and services.
- At least 51% Malaysian ownership: Bank Muamalat, Standard Chartered, Hong Leong, Bank Islam.
How is the rate on a factory loan set?
RHB, Hong Leong and Alliance price business property loans off their Base Lending Rate (BLR), Bank Islam off its Base Financing Rate (BFR); both follow Bank Negara's Overnight Policy Rate (OPR), held at 2.75% on 3 September 2026 (next decision 5 November 2026).
Bank Islam's illustration: monthly instalment on RM3,000,000 over 20 years
Conventional: RHB BizPower
- Rate
- Variable interest on RHB's BLR, on daily rest; it can rise with the OPR.
- Settling early
- 3-year lock-in from the first drawdown; 3% penalty on the approved amount.
Islamic (Tawarruq): Bank Islam Biz Smart
- Rate
- Floats on the BFR under a ceiling rate; instalments never exceed the agreed Sale Price.
- Settling early
- No lock-in; a rebate (ibra') on deferred profit.
What documents do banks ask for on a factory loan?
For a factory loan, Malaysian banks ask for three sets of papers: who the borrower is, its financial records and the property documents.
Photo for illustration purposes onlySdn Bhd
- IC of directors, shareholders and guarantors
- Board resolution
- SSM Forms 9, 44, 49 and 24 (Sections 14, 46, 58, 78) and the annual return
- Constitution, or M&A
- 3 years' audited and management accounts
- 6 months' bank statements
Sole proprietor or partnership
- Registration: Form A, B or D; partnership deed
- IC of the owner or partners
- 3 years' management accounts
- 6 months' bank statements
- 3 years' tax returns: Form B, P or PT
The property
- Sale and purchase agreement or booking receipt
- A copy of the title
- Fire insurance: compulsory at RHB
What happens between applying and drawdown?
A factory loan in Malaysia runs from approval in principle to valuation, letter of offer, facility agreement and charge, State consent where needed, and drawdown.
- Approval in principle Before you are bound to sign the sale agreement.
- Apply With the papers above; credit evaluation sets the amount.
- Valuation Normally by the bank's panel valuer, to check the property covers the loan if you default.
- Letter of offer At RHB, cancelling once the legal work has started costs RM2,000.
- Facility agreement and charge Signed within a month of accepting at RHB; see the loan’s stamp duty.
- State consent to the charge Where the title restricts charging: restrictions and consent.
- Drawdown In a sub-sale, you pay the difference first. RHB disburses “upon completion of legal documentation, or when all relevant approvals, such as the consent of the state government have been obtained”.
“…inserting that the obligation to sign the sale and purchase agreement will be ‘subject to you obtaining a loan approval in principle’ could save you from a forfeiture of your earnest deposit.”
Read it on dnh.com.my
Photo for illustration purposes only- No individual title yet? Bank Islam takes a deed of assignment instead of a charge.
- Takaful cover is optional at Bank Islam; Bank Muamalat and RHB can finance mortgage cover.
How much cash do you need for a RM2.5 million factory?
On a RM2.5 million factory, the buyer finds RM250,000 in cash at a 90% margin or RM500,000 at 80% (our arithmetic), before stamp duty, legal and valuation fees.
The cash you find on a RM2,500,000 factory
On top Loan stamp duty at 0.5%: RM10,000 on RM2 million, RM11,250 on RM2.25 million (our arithmetic); for transfer duty, see stamp duty, legal fees and RPGT.
Shortlisting factories for your bank? Browse the factories and warehouses on offer now, or send Chris your size, power and budget.
WhatsApp ChrisWhat should you check, and who should you ask?
Before a factory loan, check margin, tenure, rate and value with the bank and valuer, and the title and documents with a lawyer.
- Margin · bank Price or valuation basis, fees inside it, and whether it covers a factory.
- Tenure and lock-in · bank The maximum for this title and your age; any early-settlement penalty.
- Rate · bank BLR or BFR and the spread; for Islamic, the ceiling rate and Sale Price.
- Value · panel valuer The fee and report date.
- Title · lawyer Consent to charge, years left on a lease, the title's conditions.
- Documents and duty · lawyer The facility agreement, the charge and their stamp duty.
Before paying a valuer, check the building: what to check during a viewing and its power supply.
Send Chris the size, power, location and budget you need, or browse current listings. Agents can post a buyer's requirement.
WhatsApp ChrisSources (17)
- Bank Negara Malaysia, "Measures to Further Promote a Sound and Sustainable Household Sector", 5 July 2013 (35-year maximum tenure for residential and non-residential property financing): bnm.gov.my
- Bank Negara Malaysia, "Monetary Policy Statement", 3 September 2026 (OPR maintained at 2.75%): bnm.gov.my; and "Monetary Policy Statement", 6 November 2025 (the 2026 meeting schedule, the last on 5 November 2026): bnm.gov.my
- Bank Simpanan Nasional, "Frequently Asked Questions (FAQs) on Revised Reference Rate", 2022 (BLR and BFR move with the OPR): bsn.com.my
- Alliance Bank, Business Premises Financing, read 15 October 2026: alliancebank.com.my; and Product Disclosure Sheet, Business Premises Financing (Conventional), version 6.6, effective 1 January 2026 (commercial, industrial or residential property; margin on the lower of price and valuation; BLR plus or minus a spread): alliancebank.com.my
- Bank Muamalat, Commercial Property Financing – SME, read 15 October 2026: muamalat.com.my
- OCBC Malaysia, Industrial & Commercial Property Loan, read 15 October 2026: ocbc.com.my
- Standard Chartered Malaysia, Commercial Mortgage (eligibility, documents, tenure), read 15 October 2026: sc.com
- Bank Islam, Biz Smart Property Financing Program, read 15 October 2026: bankislam.com; and Product Disclosure Sheet, Biz Smart Property Program, 7 April 2026 (Tawarruq, BFR, the instalment illustration, takaful): bankislam.com
- CIMB, SME Biz Property Financing (margin, eligible property, required documents), read 15 October 2026: cimb.com.my
- RHB, BizPower SME Property Loan page, read 15 October 2026: rhbgroup.com; and Product Disclosure Sheet, RHB BizPower Business Property Term Loan, valid from 30 January 2026: rhbgroup.com
- RHB, Commercial Property Financing (CPF) with Redraw Facilities, for individuals (margin, tenure to age 70, documentation, disbursement, leasehold balance tenure), read 15 October 2026: rhbgroup.com
- UOB Malaysia, UOB BizProperty, read 15 October 2026: uob.com.my
- Hong Leong Bank, Business Mortgage, read 15 October 2026: hlb.com.my; and SMElite (margin of advance, documents to prepare), read 15 October 2026: hlb.com.my
- Bernama, press release, "MIDF Supports GAPIMA's Expansion With RM13.4 Million Islamic Financing For New Logistics Facility", 20 August 2026: bernama.com
- Lee Hishammuddin Allen & Gledhill, "Valuer's Duty of Care to Banks", 28 February 2025 (banks and their panel valuers): lh-ag.com
- Donovan & Ho, Shawn Ho and Suzanne Fam, "Cash Flow & Timing of Sub-Sale Property Purchase in Malaysia", 14 July 2020 (approval in principle; the buyer pays the difference before the bank disburses): dnh.com.my
- Donovan & Ho, "Incidental Costs Applicable to Purchasing Sub-Sale Property in Malaysia", 10 July 2020 (0.5% stamp duty on the loan agreement): dnh.com.my
Common questions
What margin of financing do Malaysian banks give on a factory loan?
Banks whose pages or product sheets name industrial property publish maximums of 80% to 95% on the property itself (OCBC lends companies up to 140%, CIMB 150% with working capital): Standard Chartered up to 80%, OCBC up to 85% for individuals, Bank Muamalat up to 90% (property only, completed standard light industrial factories and warehouses) and Alliance Bank up to 95%. Alliance and Bank Muamalat work from the lower of the valuation and the price.
What is the longest loan tenure for a factory in Malaysia?
Bank Negara capped financing to buy residential and non-residential property at 35 years in July 2013, among its household-sector measures. Banks whose pages or product sheets name industrial property publish shorter maximums: 25 years at Alliance Bank, Bank Muamalat and Standard Chartered, and 20 years on Bank Islam's Biz Smart, which also ends when a sole proprietor's or partnership's key promoter reaches 65.
What documents does a Sdn Bhd need for a factory loan?
The lists CIMB, Hong Leong Bank and Standard Chartered publish cover the directors' and guarantors' identity cards, a board resolution, the company's SSM forms and constitution, three years of audited and management accounts, and six months of bank statements. For the property, banks ask for the sale and purchase agreement or booking receipt and a copy of the title. Banks may ask for more during their credit evaluation.
How is the rate on a factory loan set, and what does it cost a month?
RHB, Hong Leong and Alliance price business property loans off their Base Lending Rate, and Bank Islam off its Base Financing Rate; these move with Bank Negara's Overnight Policy Rate, held at 2.75% on 3 September 2026 (next decision 5 November 2026). Bank Islam's own April 2026 illustration, on an assumed rate: RM3 million over 20 years at 4.37% costs RM18,769.61 a month, or RM22,138.18 if the rate rises 2%.
What is the difference between a conventional factory loan and Islamic financing?
A conventional loan charges interest: RHB's BizPower is variable, set off its Base Lending Rate. Islamic financing such as Bank Islam's Biz Smart uses Tawarruq, after which the customer owes the bank an agreed Sale Price; the profit rate floats on the Base Financing Rate, and total instalments never exceed the Sale Price. Bank Islam has no lock-in and grants a rebate on deferred profit when you settle early.
When does the bank release a factory loan?
RHB says it disburses upon completion of legal documentation, or when all relevant approvals, such as the consent of the state government, have been obtained. In a sub-sale the buyer pays the difference between the price and the loan first, Donovan & Ho note; the bank then redeems the seller's existing loan, if any, and pays the balance. For a property still being built, the bank pays the developer stage by stage.