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SME Financing Guarantee Scheme

SME Financing Guarantee Scheme

The Scheme aims at helping local small and medium-sized enterprises (“SMEs”) and non-listed enterprises (collectively, “Enterprises”) to obtain financing from participating lenders (“Lenders”) for meeting their business needs so as to enhance their productivity and competitiveness in the rapidly changing business environment. Under the Scheme, the HKMCI may provide guarantee coverage of 50%, 60% or 70% to the credit facilities of eligible Enterprises approved by the Lenders.

90% Guarantee Coverage under the Scheme (“90% Guarantee Product”)
With the approval of the funding by the Finance Committee of the Legislative Council on 6 December 2019, the 90% Guarantee Product under the Scheme has been introduced on 16 December 2019. The application period for the 90% Guarantee Product is until end-March 2024.

The 90% Guarantee Product aims at providing additional support to small-sized enterprises and businesses with relatively less operating experience, to obtain financing.

In 2020, with the rapid deterioration of the business environment following the outbreak and spread of the COVID-19, the Government has announced some enhancements and relief measures on the 90% Guarantee Product.

Special 100% Loan Guarantee under the Scheme (“Special 100% Loan Guarantee”)
The Financial Secretary announced in the 2020-21 Budget Speech that a Special 100% Loan Guarantee would be introduced under the Scheme. The Special 100% Loan Guarantee aims at alleviating the financial burden of paying employee wages and rents by Enterprises which are suffering from reduced income and to help minimising Enterprises shutting down and layoffs.

The Special 100% Loan Guarantee started to receive applications on 20 April 2020.

In order to further alleviate the cash flow pressure of the Enterprises due to the rapid deterioration of the business environment following the outbreak and spread of COVID-19, the Government has introduced various enhancements to and relief measures under the Special 100% Loan Guarantee.

The eligible Enterprises must have been operating for at least three months in Hong Kong as at 31 March 2022, and have suffered at least a 30% decline in sales turnover in any month since February 2020 (“Affected Period”) compared with the monthly average of any preceding quarter from January 2019 to March 2022 (“Reference Period”), provided that the Affected Period must not be earlier than the Reference Period.

The maximum loan amount for each eligible Enterprise is the total amount of employee wages and rents for 27 months or HK$9 million, whichever is the lower. The maximum repayment period is ten years. The application period for the Special 100% Loan Guarantee is until end-March 2024.

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