Easing your Company’s Financing Situation: Guide to Small and Medium Enterprises (SMEs) Loan and Subsidy Programs

It’s not easy to start a business, but it’s even more difficult to maintain one at times like this. Owners have to juggle between keeping the business running while seeking opportunities for expansions. During this economic slump, financing and operation have become struggles for SME owners. In addition to keeping its competitiveness in the market, the business also needs to deal with financing as well. Among different SME financing schemes and loan options, how should you choose the most suitable plan to help you with your business? Let’s get through this tough time together! Use our guide and compare financing options from the government, semi-governmental organizations, and private institutes, before deciding which scheme is the best for your SME.

Subsidy Schemes

[Government] Enterprise Support Scheme (ESS): Encouraging Internal R&D

[Government] SME Development Fund (SDF): Eligible to different types of development

[Government] BUD Fund: Focus on brand development, restructuring or sales promotions

[Government] SME Export Marketing Fund (EMF): Focus on traders and exporters 

Loan Schemes

[Government] SME Loan Guarantee Scheme (SGS): financing fund for business equipment purchasing or business operations

[Semi-governmental organization] SME Financing Guarantee Scheme: financing fund for business equipment purchasing or business operations

[Bank] Different loan options from banks

SMEs Loan #1: Government Subsidy and Loan Scheme

The Hong Kong Government has been putting more effort in supporting innovative start-ups in recent years by setting up more subsidy and loan schemes for easing SMEs operation and financing. Most of the schemes are applicable to SMEs from different industries. Apart from that, the SME subsidy amount has increased so businesses can get more business capital. Subsidy schemes from the government are suitable for most of the SMEs. The schemes are mainly to assist SMEs with loans and financing difficulties to suit their business and operation purposes.

Innovation and Technology Fund: Enterprise Support Scheme (ESS)

Enterprise Support Scheme (ESS) aims to encourage and support local private companies to conduct in-house research and development. ESS is available for application for funding all year round. The project duration is 24 months in general. Recipient companies can own the intellectual Property Rights and the benefit-sharing of the commercialized R&D results is not mandatory.

Eligibilitya. is incorporated in Hong Kong;
b. has a current business registration certificate;
c. is not a government subvented organization; and
d. is not a subsidiary of any government subvented organization
Funding CeilingsThe company will get a full-funding for the total amount of fund spent on R&D
Maximum funding is HK$10,000,000 per approved project
Assessment CriteriaInnovation and technology component (25%);
Technical and management capability (20%);
Financial considerations (15%);
Commercial viability of project deliverables (30%);and
Relevance with government policies or in the overall interest of the community (10%)


Applications must be qualified in each assessment criteria to be approved for funding.
RemarksOnce the funding has been approved by the Assessment Panel, the enterprise is required to, within 3 months, revise the proposal to address the relevant comments and submit supplementary information along with the supporting documents before signing the fund agreement
Application proceduresSubmit an online application through the Innovation and Technology Commission Funding Administrative System (ITCFAS) and
Hand in a duly signed and stamped original hard copy with all required documents
EnquiriesHotline: 3422-3700, or email to [email protected]

Trade and Industry Department: SME Development Fund (SDF)

SME Development Fund (SDF) provides funding for projects which aim at enhancing the competitiveness of non-listed Hong Kong enterprises. Activities under the projects may include seminars, workshops, conferences, exhibitions, research studies, award schemes, codes of best practices, databases, service centers, support facilities, and technology demonstrations, etc.

EligibilityAll non-profit-distributing organizations are eligible to apply for the funding
(non-profit-distributing organizations refer to enterprises which do not distribute profits to their directors, shareholders, employees, or any other persons;
Enterprises should be registered in Hong Kong
Funding CeilingsEach approved projects can get a maximum of HK$5 million,
or 90% of the total approved project expenditure, whichever is the less

The enterprise has to contribute the remaining 10% of the total project expenditure, which may be in cash, in kind or in the form of sponsorship
Assessment CriteriaAll applications will be assessed by a Vetting committee chaired by the Director-General of Trade and Industry (DGTI) and comprises representatives from various sectors.
RemarksApproved expenditure items:
Manpower, additional equipment, implementation fee and other direct costs including traveling expenses and expenses for consumables
Application ProceduresTSF Secretariat will arrange 1-on-1 consultations with the application
You can schedule appointment at least two weeks before submitting your application
For the application form and other supporting documents, please click here
EnquiriesHotline: 2398-5128, or email to [email protected]

Trade and Industry Department: Dedicated Fund on Branding, Upgrading and Domestics Sales (the BUD Fund)

The BUD Fund includes the Mainland Program and the FTA program. The Mainland program aims to provide support for Hong Kong enterprises to develop their business in the Mainland. For the FTA program, it aims to support enterprises to develop their brands, upgrade and restructure their business operations, and promote their sales, so as to facilitate their business development. Here are the details for the BUD Fund:

EligibilityAll non-listed enterprises registered in Hong Kong
Assessment CriteriaHK$1,000,000 per project
Maximum number of approved projects is 40, and the cumulative funding ceiling per enterprise is HK$4,000,000
RemarksProject duration should be no longer than 24 months

Notes: For Type (i) Project Application,
Qualified service providers must:
A business that is registered in Hong Kong; or a company with valid business license in the FTA economies
have established for at least one year
have completed at least 5 projects in branding, upgrading and restructuring and/or domestic sales at the time of application; and
the person in charge needs to have at least 5 years of experience in project management related; and must participate fully in the project
Application ProceduresEnterprise can choose from two types of project:
Type (i) Project Application - Develop holistic business plan; or
Type (ii) Project Application - Implementation of specific measures

Type (i) project application is suitable for involving the engagement of qualified service providers by the applicants;
Type (ii) project application is suitable for implementing projects by the applicants themselves

Click here for online application
EnquiriesHotline: 2788-6088, or email to [email protected]

Trade and Industry Department: SME Export Marketing Fund (EMF)

SME Export Marketing Fund (EMF) encourages and supports SMEs expanding their markets outside Hong Kong by providing financial assistance to SMEs for participation in export promotion activities.

EligibilityEnterprise must fulfill the following requirements:
must be registered in Hong Kong
must employ fewer than 100 persons if it is engaged in manufacturing business; or
must employ fewer than 50 persons for non-manufacturing business
must have substantive business operations in Hong Kong
Must not be he organiser/co-organiser/service provider or a related company of the organiser/co-organiser/service provider of the export promotion activity and the related services covered by the application
Funding CeilingsNo limits on the number of applications by an enterprise for funding support under EMF
Each application should cover only one export promotion activity only
The maximum amount of funding support for each successful application is 50% of the total approved expenditure incurred by the applicant enterprise or HK $100,000, whichever is the less
Assessment Criteria to Local Trade Fairs/ExhibitionsThe trade fair/exhibition should mainly target at traders outside Hong Kong and locally and;
Public admission should not be allowed in general

If public admission is allowed, the total period which is open to the public should not exceed one half of the total duration of the activity (calculated period of hours: 9am-5pm)

For trade fair/exhibitions that open to both the public and traders, and whereby a “trade zone” dedicated to traders admission exclusively, is instituted by the organizer, if the applicant enterprise’s booth is located inside the trade zone, it is deemed to be eligible for the Fund. However, the organiser must seek pre-approval from TID for such arrangement.
RemarksEnterprises that have been funded with similar applications will also be treated as the same enterprises
Application Procedure Fill in the documents

For application by post, via the drop-in box or in-person.
The address is: Room 1301, 13/F, Trade and Industry Tower, 3 Concorde Road, Kowloon City, Hong Kong
and attention to SME Export Marketing Fund Branch Service Counter
Applicant enterprises should indicate clearly on the Application Form whether they are applying for initial payment cum final payment or reimbursements of eligible expenditure items
Applications should be submitted before the stipulated deadline
If the deadline for application lies on the weekends, submissions need to be made a working day before the deadline
Late submission of an application will not be accepted

For online application,
Click here for the e-Form
Upload all the required documents
Applicants are required to download the “Declaration for Application” and sign it with the company chop,
and submit it to “SME Export Marketing Fund Branch” of TID by post, via the drop-in box or in person within a week.
For the first time application for the initial payment, a signed funding agreement should also be submitted in duplicate together with the declaration
EnquiriesHotline: 2398-5127, or email to [email protected]

Trade and Industry Department: SME Loan Guarantee Scheme (SGS)

SME Loan Guarantee Scheme (SGS) provides a loan guarantee to SMEs to help them secure loans from the participating lending institutions for acquiring business installations and equipment or meeting the working capital needs of general business uses.

EligibilityEnterprises must be:
registered in Hong Kong
must employ fewer than 100 persons if it is engaged in manufacturing business; or
must employ fewer than 50 persons for non-manufacturing business
not an associate of the lender; and
not carrying on the business of a lender
Funding CeilingsThe amount of guarantee for an enterprise is 50% of the loan amount
The Maximum total guarantee amount is HK $6 million

The guarantee period is up to a maximum of five years, counting from the first drawdown date of the loan
Vetting CriteriaDepends on the financial situation of the applicant enterprise
RemarksIf an enterprise has fully repaid the loan, the enterprise may use the respective guarantee amount one more time for acquiring new loan(s), subject to a maximum guarantee amount of $6 million.

There is no need to pay any fees to the government to apply for the credit guarantee of this plan
Application ProceduresEnterprise should apply for a Business Installation and Equipment Loan or a Working Capital Loan from a Participating Lending Institutions (PLI)

At the time of the loan application, the enterprise is required to submit relevant financial information including:
Latest audited accounts for limited company
Latest financial statements for unlimited company
for PLI’s assessment

The PLI assesses the loan application and determines whether the applicant enterprise requires the guarantee of the SGS. An enterprise requiring the guarantee of the SGS should complete the loan guarantee application form and submit it to the PLI for endorsement. The PLI then submits the endorsed application form to the TID for consideration.

Once the application is approved, the TID would issue a guarantee in favour of the PLI for the loan concerned.
EnquiriesHotline: 2398-5129,or email to [email protected]

SMEs Loan #1: Semi-governmental Organization Financing Schemes

Financing schemes provided by the semi-governmental organizations include SME Financing Guarantee Scheme offered by The Hong Kong Mortgage Corporation Limited, which aims at helping local SMEs to obtain financing for their operation and business.

SME Financing Guarantee Scheme

The Hong Kong Mortgage Corporation Limited (HKMC) launched The SME Financing Guarantee Scheme in late-2019. The scheme focuses on assisting small-scale and SMEs which are still at the beginning of the business stage. The Scheme provides a guarantee coverage of 50% to 80%, and 90% Guarantee Coverage and a Special 100% Loan Guarantee.

The details of the Scheme:

EligibilityThe applicant enterprise must:
be registered and is still operating in Hong Kong;
not carrying on the business of a lender or otherwise providing funds available for borrowing in any way;
not be an affiliate of the Lender; and
not be a company or corporation which has any of its shares listed on The Stock Exchange of Hong Kong Limited (whether on its Main Board or the Growth Enterprise Market) or any similar exchange in or outside Hong Kong


In relation to the applications for 80% Guarantee Product and 90% Guarantee Product under the Further Enhancement Measures received by the HKMCI on or before 31 May 2021, eligibility criteria is relaxed to cover a company or corporation which has any of its shares listed on The Stock Exchange of Hong Kong Limited (whether on its Main Board or the Growth Enterprise Market).
Deadlines for Applications50%-70% Guarantee Products: N/A
80%-90% Guarantee Products: End-June 2022
Special 100% Loan Guarantee: 19 April 2021
Funding Ceilings 50-80% Guarantee Products:
HK$12,000,000 per borrower
Applications submitted on or before 31 May 2021, maximum amount for qualifying guarantees under the 80% Guarantee Product is HK$18,000,000

The maximum guarantee period is 5 years under normal circumstances. For applications under 80% Guarantee Product, the maximum guarantee period is 7 years.


90% Guarantee Products:
Applications before 31 May 2021, maximum guarantee amount is HK$8,000,000. The maximum guarantee period is 5 years.

Special 100% Loan Guarantee Product:
Borrower’s total amount of wages and rents for 12 months, or HK$5,000,000, whichever is the lower
Annual Guarantee Fee Rate50-70% Guarantee Products: Range from 0.5%-3.2% of the loan amount/facility limit

80% Guarantee Products: up to 0.45% of the loan amount/facility limits
Annual Interest RateP-2.5%
Remarks50%-80% Guarantee Products:
The Borrower’s business must have been in operation for at least one year in Hong Kong as at the date of submission of the relevant Application Form
Term loans and revolving loans are provided, the ratio of the two is not restricted
Maximum guarantee period is 7 years
The proceeds must be used for:
the purpose of acquisition of assets to facilitate the Borrower’s business operations or of general working capital for the Borrower’s business operations; or
refinancing (with conditions, please refer to “the Use of Proceeds on page 8 of this document)

Special 100% Guarantee Product:
The Borrowers must have suffered at least a 30% decline in sales turnover in any month since February 2020 compared with the monthly average of any quarter
The Borrower must not have any outstanding default of more than 60 days
Application ProceduresApplicant Enterprise should apply loan from Participating Lenders
Participating lenders will review the application before submitting the guarantee application form and relevant supporting documents to the HKMCI for review and approval
EnquiriesHotline: 2536-0392, or email to [email protected]

SME Loan #3: SME Loan Options from Banks

When facing financing difficulties, loans from banks are most likely the first options that SME owners would think of. Getting a loan from a bank is the most traditional way of dealing with financing difficulties. Banks also offer a variety of SME loan options for SMEs and start-ups. When choosing a loan scheme, some of the schemes indicate that guarantee is not required. Enterprise could also choose loans with a guarantee, which the loan ceilings would be higher. Choosing loans from banks is more flexible and fewer requirements, but for enterprises with fewer years of operation experiences, corporate directors are required to provide a personal guarantee in general, and they need to submit their personal credit reports as well. In view of this, some banks will also help apply for SME Financing Guarantee Schemes to increase loan amounts and reduce risks.

Banks

ProgramRequirementsInterest RateLoan CeilingsMaximum repayment periodRemarks
Hang Seng Bank: "Hang Seng Business Loan"At least 6 months of business operation time10-13%HK$2,000,0005 years/
HSBC: "Business Instalment Loan"At least 2 years of business operation time15.22-19.62%HK$1,500,0005 yearsThe minimum loan amount is HK$50,000 Can apply for the "SME Financing Guarantee Scheme" together, with a loan amount of up to HK$6,000,000
Bank of China: "Small Business Loan: 'Unsecured Loan'"At least 6 months of business operation time 6.23-25.06%HK$2,000,0005 yearsNeed to submit personal financial statements
Standard Charted: "Business Instalment Loan"At least 3 years of business operation timeDepends on the planHK$6,000,0005 yearsApplying along with the specific government “Enterprise Supporting Scheme”, borrowers can enjoy standardized 5% actual annual interest rate
DBS SME Banking: "EC-Loan"At least 3 years of business operation timeDepends on the planHK$2,500,0003 years/
Dah Sing Bank: "328 Business Banking"N/A 7.79%HK$2,000,0005 years/
CMB Wing Lung Bank: "Micro Enterprise Loan"At least 1 year of business operation timeDepends on the planHK$1,500,0005 yearsNeed to submit personal financial statements and other income statements for application
Public Bank: "SME Loan Program"Only Business Registration is required for applicationDepends on the planHK$1,000,0003 years/
OCBC Wing Hang: "Businessman Loan"Only Business Registration is required for application7%HK$1,000,0005 years/

Of all the financing options, some of the SME loan options take a longer time for applications. Applicants also need to be careful with the procedures and details. When dealing with daily operation expenses and emergent extra cash flow, you could also explore other options for financing, so to ease your mind when juggling with business operations and cash flow. Reap – Secure Online Payment Platform – enables SME owners, like you, to pay expenses and collect revenue – to and from anyone and anywhere – entirely via credit card. Even if your payees don’t accept credit card payments, you could still pay them in 40 different currencies. You can also enjoy 58 days of interest-free financing and ease payment terms, so you could keep your cash on hand to grow your business. You can also track and manage your payment collections on Reap, as well as set up automated payment and schedule recurring payments, making it easier to keep up with your monthly payment schedule. With Reap, you can even earn air miles, cashback, or program points through your credit cards! Explore the potentials on your wallet by registering your account on Reap for FREE!

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