Government funding plays a crucial role in boosting Small and Medium-Sized Enterprises in Sabah, Malaysia. The study focused on how funding from agencies like Yayasan Tekun Nasional and Agro Bank helped these businesses. The findings show that government funds help SMEs by providing capital for starting and improving businesses, supporting skills development, enhancing relationships, and encouraging entrepreneurship. Overall, government funding is key to enhancing the competitiveness of SMEs in Sabah, Malaysia. It is recommended that efforts continue to support and fund these businesses to improve their competitiveness.