Things to Learn About SME Loans in Hong Kong
Small and medium-sized enterprises (SMEs) are the backbone of Hong Kong's dynamic economy, yet securing adequate financing remains one of the biggest challenges. Whether you want to expand your business or stay in the broad market, understanding the landscape of SME loans in Hong Kong is essential. SMEBro will explain various aspects of loans, such as how much SME loans are available, what a financing guarantee scheme is, and some key things to strengthen your borrowing decisions and unlock growth opportunities for your business.
What are the typical eligibility criteria for SME loans in Hong Kong?
The eligibility criteria for SME loans in Hong Kong can vary depending on the banks, government-backed schemes, or private financial institutions, but the following criteria are: Business must be legally registered and operating in Hong Kong with a valid Business Registration Certificate, SME manufacturing sector with fewer than 100 employees or non-manufacturing sector with fewer than 50 employees, good financial statements, have at least 6 months to 2 years of operating history, and good credit standing.
How much can SME borrow?
In Hong Kong, the SME loan amount can depend on the loan type and guarantee scheme you choose. This is a breakdown of some borrowing limits:
SME Financing Guarantee Scheme (SFGS)
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For 50% guarantee loan by Trade and Industry Dept will offers loans up to HKD 12 million, guaranteed at 50% with a maximum guarantee of HKD 6 million, with repayment term up to 5 years.
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For 80% guarantee product, the maximum loan amount is HKD 18 million and repayable over up to 10 years.
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For 90% guarantee product, the maximum is up to HKD 8 million with repayment term up to 8 years.
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For 100% guaranteed preferential loan, it capped at HKD 4 million or a formula based on salary and rent costs, whichever is lower (some provisions reference up to HKD 6 million under term limits and specific relief programs).
What documents are usually required for SME loan applications?
Before you apply for an SME loan in Hong Kong, you need to prepare a set of documents to assess your business's financial health, credibility, and repayment ability. Common documents required for SME loan applications in Hong Kong: Business registration and identity documents, financial and bank records, business plan or loan proposal, proof of business operation, personal guarantee form (if required), SME Financing Guarantee Scheme application form (if applying through SFGS), recent credit reports, organization chart or ownership structure details.
Do I need to provide collateral or a personal guarantee?
To apply for an SME loan, you need to provide a personal guarantee, and in some cases, collateral is also needed depending on the type of SME loan and the lender's risk assessment. The personal guarantee is commonly required to give the lender extra assurance that you as the business owner are personally committed to repaying the loan.
For collateral, sometimes required when you are borrowing a large amount over HKD 5-10 million, your business is new or has limited financial history, or when you are not applying through a guaranteed scheme like SFGS. The common types of collateral are property, business equipment, inventory, or fixed deposits.
How long does it take to get an SME loan approved?
The approval time for an SME loan is dependent on the complexity of your application and the loan amount. For government schemes, the approval time is 2-4 weeks including both the bank's credit assessment and the HKMC's review. But if you apply at peak demand, processing may take longer for up to 6 weeks.
For traditional lenders like bank loans, the approval time is 1-4 weeks. Tips to speed up your approval are to submit full and accurate documentation, maintain good credit records, and provide a clear business purpose and repayment plan.
Can startups get SME loans?
Yes, startups in Hong Kong can get SME loans, but it's more challenging than for established businesses. Startups without the financial history and profitability that lenders seek may have limited options or face stricter terms. Startups less than a year old can still apply for SFGS if they have business plans and proof of viability. However, when applying, you'll still need a personal guarantee, a solid proposal, and projected cash flow.
How can I increase my chances of loan approval?
To increase your chances of getting an SME loan approved in Hong Kong as a startup or SME, you need to show lenders that your business is low-risk, credible, and capable of repayment. A good personal and business credit report (no defaults, late payments, or judgments) will give you a good score in the eyes of lenders. However, if you don't have a business credit history, your personal creditworthiness becomes more important.
Guide to SME Loans in Hong Kong for Business Growth
Ensure your business is formally registered in Hong Kong with a Business Registration Certificate and a Certificate of Incorporation, if applicable. Clear ownership builds lender confidence. Next, prepare a solid business plan, including an executive summary, product or service description, market analysis, target audience, sales strategy, financial projections, loan usage, and repayment plan. Lenders want to know how you'll use the loan and how you'll repay it.
If you can demonstrate consistent cash flow or early traction, this will strengthen your chances of securing an SME loan. Ensure you have all the necessary documentation prepared and organized. If you're overwhelmed by the requirements for applying for a loan, hiring a professional will simplify and ensure your process is more secure.
SMEBrother as your business solution for SME loans
We understand the unique challenges small and medium-sized businesses face, whether it's cash flow gaps, expansion plans, or unexpected expenses. That's why SMEBrother offers a streamlined, hassle-free approach to help you find and apply for the most suitable SME loan, tailored to your needs.
With expert guidance, fast approvals, and access to a wide network of trusted lenders, SMEBrother simplifies the financing process so you can focus on growing your business with confidence. Our promise: No success, no fees!
We have helped many SMEs to get government-backed SME loans, and now is your time. Get a free one-on-one consultation now and start to get your business loans with us!
