Running a small business in Hong Kong is not easy. Even though it is one of the most business-friendly cities in the world for enterprises because of its open markers and low taxes, securing funding remains a major problem for many small and medium-sized enterprises (SMEs). In this guide, SMEBro will provide Do's and don'ts to help you prepare and position your loan applications, navigating the Hong Kong lending landscape with confidence and clarity.
Do prepare a detailed business plan
Lenders, whether they're banks or government-backed schemes want clear evidence that your business is strategic and financially sound. Your business plan is the first place they look for that evidence. A well-prepared business plan shows that you have a realistic growth strategy, know how to manage risks, and can forecast your financial performance.
Do check your personal and business credit history
Check both your personal and business credit history, as lenders will use it to assess your financial discipline and trustworthiness. A poor credit profile can reduce your chances of getting approved or lead to higher interest rates and stricter terms. Especially in Hong Kong, startups or SMEs with limited financial history may have the option of showing the owner's personal credit score.
Do this at least 1-2 months before applying, so you have time to fix any errors and improve your credit score. Settle overdue accounts to improve your credit standing, and limit new applications in a short time to avoid lenders thinking you're desperate for cash.
Do research the right type of loan
Research the type of loan first, because not all business loans are created equal. Some popular loan types in Hong Kong are SME Financing Guarantee Scheme loans for working capital and business development, trade finance for import/export businesses needing to finance trade transactions, overdraft for short-term cash flow needs, term loans for business expansion and renovations.
Things to Know About BUD Fund and EMF Hong Kong
When choosing the right loan, estimate how much you need, don't over or under-borrow. Match the loan term to your funding needs, compare interest rates and fees, evaluate your ability to repay.
Do explore government support options
The government-backed support schemes will help SMEs access funding more easily with better terms. These programs are designed to reduce lending risk for banks and make financing more accessible for small businesses that may not meet traditional lending criteria. By guaranteeing a portion of the loan, the government encourages banks to lend to SMEs they might otherwise reject. This reduces your financial barriers and increases your chance of approval.
The key government support programs in Hong Kong are SFGS, SME Export Marketing Fund (EMF), and Branding Upgrading and Domestic Sales Fund (BUD Fund). If you are unfamiliar with these programs, you can rely on SMEBro with the application process.
Do maintain proper financial records
Keep the financial records accurate and organized when applying for a small business loan. Lenders rely heavily on your financial documents to evaluate how your business performance and stability. Examine your revenue and profit trends, cash flow stability, existing debts and liabilities, tax and MPF compliance, and operational efficiency. Avoid any unclear or inconsistent records, because lenders won't have the confidence they need to lend you money, even if your business is actually doing well.
Most lenders in Hong Kong will require bank statements for the last 6-12 months, audited financial statements for the last 2-3 years, tax documents, MPF contribution records, sales and expense records.
Don’t overborrow
When you apply for a business loan more than your business needs, it can backfire badly. Overestimating your funding needs signals poor planning and increases the risk for lenders. Every lender wants to see that you have a clear and justified use for the loan amount you're requesting. If your loan request seems excessive, it increases your debt burden and lowers your chances of approval. Even though you have "just in case" funding, larger loans mean higher monthly payments and could strain your cash flow.
Don’t submit incomplete or incorrect information
Submitting incomplete or incorrect information will bring your application rejected. Whether it's outdated financials, missing bank statements, or inconsistent details in your application, any discrepancies can create doubt in the lender's mind about your credibility. Any missing key information about your business will delay application processing, can damage your professional image, and could violate loan agreement terms.

The common mistakes to avoid are incorrect business registration or outdated contact information, skipping required supporting documents, and missing financial statements.
Don’t hide existing debts
Never hide existing debts, because transparency can build trust. Whether it's a loan from another bank or an unpaid credit facility, do not hide these obligations to lenders. Hiding something during a business loan application is a serious red flag and can lead to immediate rejection or legal consequences.
Hong Kong's financial system is highly regulated, and lenders have access to credit reference databases. If they discover you withheld information about your debts, it will raise major concerns about your financial judgment.
Don't apply under pressure
Applying for a small business loan under pressure or in a panic is one of the most common mistakes entrepreneurs make. When you apply in a rush, you will make poor decisions or submit a weak application that leads to rejection. Lenders can often sense urgency and it may signal to them that your business is in distress, you're borrowing out of desperation, and you're not in control of your finances. What should you do instead? Plan ahead and monitor your cash flow, prepare your documents properly, consult an expert if there is anything you are unfamiliar with the business loan application.
Don't forget SMEBrother as your one-stop-solution
Having the right support when in a fast-paced market world like Hong Kong can make all the difference. SMEBrother is the best answer for you related to SME financing, government-backed loan schemes, and business advisory services.
Why choose SMEBrother? We avoid "don'ts" like submitting incomplete or inaccurate documents. Our experts will help you prepare a complete and lender-ready application, increasing your chances of approval. Plus, whether you need assistance with MPF compliance, bookkeeping, or applying for grants like the BUD Fund or EMF, we're ready to help you for the long term, not just for a single loan.