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SME Financing Guarantee Scheme

Helps You Grasp Business Opportunities and Expand Your Business

 The SME Financing Guarantee Scheme ("Scheme") was launched on 1 January 2011 by The Hong Kong Mortgage Corporation Limited ("HKMC"). Since 1 May 2018, the Scheme business has been transferred to and carried out by HKMC Insurance Limited ("HKMCI"), a wholly owned subsidiary of the HKMC.

 

 

Objective and Guarantee Coverage

The Scheme aims to help small and medium-sized enterprises ("SMEs") and non-listed enterprises to obtain financing from participating 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 approved facilities of eligible enterprises.

 

 

Award

 The HKMC (the holding company of the HKMCI) was honored the Best SME’s Partner Award granted by The Hong Kong General Chamber of Small and Medium Business for six consecutive years since 2012.

 

Best SME’s Partner Award - Logo 2017

 

 

Special Concessionary Measures

To help tide SMEs over financing difficulties as a result of a possible credit crunch in midst of the uncertain global economic environment, the Financial Secretary announced in the 2012-13 Budget Speech a series of measures to support the SMEs, including the introduction of the time-limited Special Concessionary Measures under the Scheme which provides 80% guarantee coverage (“80% Guarantee Product”) to eligible facilities approved by participating lenders at concessionary guarantee fee rates.

 

The 80% Guarantee Product has provided strong support for SMEs in obtaining financing in the commercial lending market since its launch on 31 May 2012 and an increasing number of enterprises have benefited from the Special Concessionary Measures. To help enterprises tide over their liquidity needs, grasp economic opportunities and boost their competitiveness, the Financial Secretary announced in the 2018-19 Budget Speech the further extension of the application period for the 80% Guarantee Product for another year until 28 February 2019.

 

As announced in 2016-17 Budget Speech, qualifying 80% guarantees can enjoy 10% off on annual guarantee fee rates and are no longer subject to a minimum annual guarantee fee rate of 0.5% ("Guarantee Fee Concessions") (Note). Enterprises can consult their lenders for details of the eligibility criteria.

 

Note: The Guarantee Fee Concessions are applicable only to guarantee fees on qualifying 80% Guarantee Product due and payable on or after 1 June 2016.

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Eligibility

 Eligible enterprises must have business operations in Hong Kong and be registered in Hong Kong under the Business Registration Ordinance (Chapter 310). They must also have been in operation for at least one year on the date of guarantee application, and have good loan repayment records. Listed companies, lending institutions and affiliates of lending institutions are not eligible for the Scheme.

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Type and Use of Loans

The Scheme guarantees both term loan and revolving credit facilities. An enterprise can borrow a term loan and a revolving credit facility at the same time. There is no limitation on the proportion between the two types of facilities.  


The loans must be used for providing general working capital for the enterprises’ business operations, acquisition of equipment or assets (such as industrial or commercial properties, machinery and equipment, but excluding residential properties) in relation to the enterprises’ business or refinancing any facilities with a guarantee issued under the Scheme.

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Maximum Facility Amount, Maximum Loan Tenor and Maximum Interest Rate

Each enterprise and its related entity(ies) can obtain guarantee(s) in respect of facility(ies) not exceeding HK$12 million in total at any one time under the Scheme under normal circumstances. The maximum loan tenor is five years.

 

However, with respect to any application for the 80% Guarantee Product, the HKMCI may in its sole and absolute discretion determine that an eligible enterprise and any of its related entity(ies) may be entitled to separate maximum facility amounts. Enterprises may approach the participating lenders for details of the arrangement.

 

The Scheme requires the overall interest rate of the guaranteed facility not exceed a specified interest rate ceiling but the HKMCI will also consider applications with overall interest rate exceeding such ceiling on a case-by-case basis. The HKMCI will adjust and announce the relevant ceiling to the overall interest rate in accordance with the interest rate cycle. Enterprises should consult their lenders as the overall interest rate level applicable to each facility is decided by the participating lenders.

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Guarantee Fee

For guarantees covering any facility with an overall interest rate not exceeding the annual interest rate ceiling of 10%, the annual guarantee fee rates for the 50%, 60% or 70% guarantee products range from 0.5% to 3.2% of the loan amount / limit of the facility. Under the 80% Guarantee Product, the annual guarantee fee rates for any guarantee fees due and payable before 1 June 2016 range from 0.5% to 1.0% of the loan amount/limit of the facility.

 

As announced in 2016-17 Budget Speech, qualifying 80% guarantees can enjoy 10% off on annual guarantee fee rates and are no longer subject to a minimum annual guarantee fee rate of 0.5% (“Guarantee Fee Concessions”) (Note).

 

Enterprises can pay the guarantee fee by annual payments or, for term loans, pay in one lump-sum upfront. Such lump-sum guarantee fee paid upfront can be financed by utilising the relevant facility. Enterprises can consult their lenders for details or make use of the Scheme’s guarantee fee calculator for reference.

 

Note: The Guarantee Fee Concessions are applicable only to guarantee fees on qualifying 80% Guarantee Product due and payable on or after 1 June 2016.

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Application Procedure

 Enterprise should contact the participating lenders to apply for the loan. The participating lenders will review the application before submitting the guarantee application form and relevant supporting documents to the HKMCI for review and approval.

A list of the participating lenders is available here.

Enquiry

For general enquiries about the Scheme, please contact:
1. the participating lenders; or
2. the HKMCI

 

Scheme Hotline: 2536 0392

Scheme Enquiry: sfgs_enquiry@hkmci.hk

 

 

Remarks

This Scheme is operated by the HKMCI. The copyright to the contents of this webpage is owned by the HKMCI.

General Information

1) List of Participating Lenders
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2) Leaflet
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3) Success Stories
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4) Product Factsheet
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5) Application Procedures
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6) List of Application Documents
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7) SME Financing Guarantee Fee Calculator
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8) SME Financing Guarantee Scheme (80% Guarantee Product) Statistics
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9) Application Procedures for an Authorized Institution to become a Participating Lender
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10) Personal Information Collection Statement
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