Did you know that Small and Medium Enterprises (SMEs) in Hong Kong are growing every year as seen from SME performances and resilience after Covid-19 recovery and growth of the economy? There are now more than 340,000 SMEs in Hong Kong with 45% of its workforce in the private sector and constituting more than 98% of the city's business establishments. More than 1.3 million people have filled job opportunities SMEs have created to date. As an entrepreneur who wants to start opportunity in Hong Kong, you need to think about the stability of your business starting from a cost perspective. If you are confused about how to handle costs and require you to take out a loan, we will discuss guaranteed loans for SME in this article.
What is a SME loan?
Small and Medium Enterprises need cost stability for progressive impact on the industry and society. An SME loan is a type of business loan designed for entrepreneurs who want to plan to start and run their own business. SME Loan makes it easier for them to promote and support local industries for overall economic growth of Hong Kong.
The borrowers need to repay the loan amount according to the fixed interest rate. SME loans are very suitable for starting a business or for further expanding their business. Each lender has its own requirements and available offers and with different terms.
What is the purpose of SME loan?
The purpose of an SME loan is finance working capital or capital expenditure requirements for business in manufacturing, trading, production, processing, or service. Small businesses need funding to survive in their business so that they always get off the ground. There are many things that must be tackled, such as maintaining inventory, managing operations, upgrading equipment, or recovering from losses.
Should I Apply BUD Fund or TVP?
While medium businesses want to expand their business even further with loans so that they can remain steady in business competition while trying to expand the reach of their business. Sometimes there are certain conditions where companies have to take loans for their survival. As long as the company is able to return it according to the interest rate, the company's finances can become more stable and guarantee the progress of its business.
Is business loan and SME loan the same?
Many people still cannot differentiate between business loans and SME loans, thinking that they are the same thing. Even though they are both loans, their functions are different and what that means for your business.
Business loans will be taken to established businesses for various needs such as warehousing needs, renting more property, launching new products, hiring new employees, or other major needs. It can be differentiated from a term business loan, there are those who want to take short-term financing for short-term needs, or long-term needs as long as the company can show a good credit history.
While SME loans are needed by small and medium businesses who want to finance their daily operations or expand their business. SME loans can also be used to increase working capital, purchase equipment and inventory, but these are all initial steps so that the money the company has can be used for other, more priority needs. The loan amount is not as big as a business loan, but can still be used for marketing purposes, legal services, or hiring a few fresh talents.
Another thing that differentiates these two types of loans is documentation. The larger the loan amount required, the more documentation that must be prepared, such as shareholder lists, financial statements, directors and partners list, income tax returns, etc.
Benefits of guaranteed loans for SME
There are many benefits that can be obtained when a small or medium business gets guaranteed loans for SME. Here are some of the benefits you can get:
- Flexible
With so many loan offers from lending institutions or banks, you will expect some great offers. Try to always look at those financial services backed by government schemes, provided interest rates and various terms as per your business needs. If you want to use an SME loan, you must be as flexible as possible to suit your business needs. Pay attention to repayment time and interest rates depending on your business progress and the scope of your financial returns.
- Easy to avail
Almost all local banks and private financial institutions provide SME loans with their own terms. All of this is in order to advance SMEs which can have a positive impact on income growth in Hong Kong. Now you can do SME loan applications both offline or online. But don't be careless in making the decision to take a loan, because you have to determine how you will repay the loan and other conditions that must be taken into account.
- Helps grow your business
If your business already has financial assistance to start or advance the business to a certain level, you can focus on work. Every step you take will have support costs, depending on your business decision to continue the business while looking at your company's financial ability to repay the loan you took.
Is there an agency that can provide guaranteed loans for SME?
SMEBrother is a professional business consultant in Hong Kong who has extensive knowledge of government-guaranteed SME loan programs. You will be helped to analyze the market and understand different government SME loan programs, fast corporate financing plans, and flexible formulas for you to repay the loan. You can get a maximum loan amount of up to 9 million with a maximum repayment period in 10 years with an annual interest rate of 2.5%.
SMEBrother is your most professional and reliable comprehensive business service partner, because we understand the customer's business model and financing needs, analyze whether your case and the company's ability to take loans is in accordance with the SME government guarantee program. We will assist customers to prepare required documents and help customers to choose the best option for commercial loan products among dozens of banks in Hong Kong.
SMEBrother will always be there starting from consultation, submitting the application case, following up the bank progress, striving for the maximum loan amount, taking lowest interest, up to loan approval as soon as possible. All of this is to help the customer's company grow as your SME BRO.
