-
SME
Loan Guarantee Scheme
- SME
Export Marketing Fund
- SME
Development Fund
SME Loan Guarantee Scheme (SGS)
Eligibility
Application
Procedures
Use
of Loans
-
Business Installations and Equipment Loan Guarantee
- Working Capital Loan Guarantee
Guarantee
Amount and Period
-
Business Installations and Equipment Loan Guarantee
- Working Capital Loan Guarantee
Other
Information
SME Export Marketing Fund (EMF)
Eligibility
Amount of Grant
Application Procedures
Amendment/Cancellation of Applications
Application Result
Others
SME Loan Guarantee Scheme
The SGS is a loan guarantee scheme whereby the Government acts as the guarantor of individual small and medium enterprises (SMEs) to facilitate them to secure loans from banks and financial institutions that have participated in the Scheme [i.e. the Participating Lending Institutions (PLIs)] for (a) acquiring business installations and equipment and for (b) meeting working capital needs of general business uses.
The overall objective of the Scheme is to assist SMEs to enhance their productivity and competitiveness.
The SGS provides two types of guarantees. They are -
Eligibility
To be eligible for the Scheme, a Borrower:
- provides services for its members (whether or not for the purpose of gain); and
- has club premises of which its members have a right of exclusive use.
**
"Number of persons employed" shall include individual proprietors,
partners and shareholders actively engaged in the work of the business;
and salaried employees of the business, including full-time or part-time
salaried personnel directly paid by the business, both permanent and temporary,
at the time of lodging applications under the SGS.
Yes. As long as your company has been and remains duly registered for carrying a business in Hong Kong under the Business Registration Ordinance, and provided that it has met other eligibility criteria as stated above, it will be eligible to apply for the SGS.
Application Procedures
All applications for the SGS must be lodged through the PLIs. The relevant PLI will assess your application and determine whether the loan application requires the guarantee of the SGS. If so, the PLI will refer the guarantee application to the Trade and Industry Department of the HKSAR for consideration.
No. All applications for guarantee under the Scheme are free of charge.
You should pass to the relevant participating lending institution (PLI) a copy of the valid Business Registration Certificate of your business when lodging the application for guarantee.
In addition, a limited company is required to pass its latest audited accounts and an unlimited company its latest financial statements to the PLI concerned at the time of lodging the loan application. This requirement will not apply to SMEs that are established for less than 18 months at the date on which the loan application is received by the PLI concerned, though the PLI will also assess their current credit and financial information. For these SMEs, they are required to produce documentary proof on their date of establishment.
For application for business installations and
equipment loan guarantee, if the business installations and equipment to
be acquired under the SGS shall be used by another business entity inside
or outside Hong Kong, you need to seek the prior consent of the PLI concerned
and the Government on such arrangement. In making application to the Government,
you should provide supporting doucment(s). In case if the business installation
and equipment is located in the Mainland China, you can provide investment
approval certificate, agreement on materials processing, production agreement
etc. as the supporting document to show the relationship between your business
and the end user of the business installations and equipment. Provided that
the arrangement is relevant and essential to your operation in Hong Kong,
the Trade and Industry Department will give favourable consideration to
the application.
The Government allows a nine-month period from the end of your business's financial year for you to prepare the relevant audited accounts/financial statements. If the loan application is made within the grace period, it will be acceptable for you to show only the preceding accounts. However, if the required audited accounts/financial statements represent the first accounts of your business, they are expected to be available 18 months after the date of establishment of your business.
Upon receipt of duly completed applications for guarantee from participating lending institutions, the Trade and Industry Department will normally take no more than three clear working days to process the applications.
You may contact the relevant participating lending institution or through the online services (business must possess an e-Cert (Organisational)) for the application status.
Use
of Loans
- Business Installations and Equipment Loan Guarantee
The business installations and equipment loan guarantee covers items of machinery, tool, computer software and hardware, communication system, office equipment, transport facilities, furniture, and fixtures (e.g. air-conditioning system, built-in cabinets and lighting system. However, it does not cover decoration works).
Can I apply for guarantee if the business installations and equipment are located outside Hong Kong?
Yes. Provided that they are to be used by the borrower, the business installations and equipment to be acquired under the SGS may be placed outside Hong Kong with the prior written consent of the participating lending institution concerned. However, if the arrangement involves selling, sub-leasing, charging or part with possession of the business installations and equipment, the prior consent of the Government is also required. In making application to the Government, you should provide supporting doucment(s). In case if the business installation and equipment is located in the Mainland China, you can provide investment approval certificate, agreement on materials processing, production agreement etc. as the supporting document. Provided that the arrangement is relevant and essential to your operation in Hong Kong, the Trade and Industry Department will give favourable consideration to such application.
Yes. The loans may be used for acquiring second-hand installations and equipment.
Yes. Under normal circumstances, if the business installation/equipment is delivered to the borrower for trial use only and payment for the installation/equipment has not been made in full, it is still eligible to apply for the Scheme.
No. The objective of the SGS is to help SMEs obtain new money to acquire installations and equipment relating to their business operations for enhancing competitiveness and productivity. Hence, the business installations and equipment loans cannot be used for financing or re-financing any acquiring of installations and equipment that have already been in the possession of the borrower or any of its associates at any time on or before the date on which an application for facility is received by the relevant lending institution.
- Working Capital Loan Guarantee
The working capital loan guarantee under the SGS should be used for meeting working capital needs of general business uses of the SMEs. SMEs are not allowed to use the working capital loan(s) to repay, restructure or repackage any loan, credit facility or payment obligation.
Yes. The working capital loan guarantee is not conditional on the applicant having first obtained business installations and equipment loan guarantee under the SGS or the SME Business Installations and Equipment Loan Guarantee Scheme (BIG).
Guarantee
Amount and Period
- Business Installations and Equipment Loan Guarantee
With effect from March 2008, the maximum amount of business installations and equipment loan guarantee for each SME is $5 million or 50% of the approved loan, whichever is the less.
Yes, as the $5 million maximum guarantee amount is cumulative in nature, the SME can still enjoy an additional $3 million guarantee (or 50% of the approved loan, whichever is the less).
The guarantee period for the business installations and equipment loan is up to a maximum of five years.
The guarantee period will count from the starting date of the approved loan, i.e. the date on which funds are first withdrawn against the approved loan, or the date on which the hire-purchase agreement takes effect.
Business installations and equipment loans guaranteed under the SGS should be non-revolving loans or hire-purchase agreements. They should be repaid to the relevant participating lending institution by instalments. The first instalment should take place not later than six months after the loan has been activated and the interval between subsequent instalments should not exceed three months.
- Working Capital Loan Guarantee
The maximum amount of working loan guarantee for each SME is $1 million or 50% of the approved loan, whichever is the less.
Yes, the Working Capital loan guarantee is newly introduced. SMEs who have met the eligibility criteria as stated above can apply.
The guarantee period for the working capital loan is up to a maximum of two years.
The guarantee period will count from the starting date of the approved loan, i.e. the date on which funds are first withdrawn against the approved loan.
Working capital loans guaranteed under the SGS should be non-revolving loans. They should be repaid to the relevant participating lending institution by instalments. The first instalment should take place not later than six months after the loan has been activated and the interval between subsequent instalments should not exceed three months.
Other Information
No. The Government will rely on participating lending institutions to exercise their usual prudent professional judgement in assessing applicants' creditworthiness.
Under the market driven principle, there is no standard interest rate for loans under the SGS. The interest rate shall be a matter of the commercial decision between individual lending institutions and borrowers. However, the Government has asked participating lending institutions to take into account Government's guarantee when they decide on the interest rates to be charged.
Yes. The Government may issue more than one guarantee in favour of the same or different participating lending institutions with respect to an SME, as long as the cumulative amount of guarantee issued to the SME and the corresponding participating lending institution(s) are within their respective ceilings.
For more information about the SGS, please contact banks or financial institutions which have participated in the Scheme. A list of participating lending institutions can be obtained from this homepage. Alternatively, you may contact the Trade and Industry Department at :
| Tel: |
2398 5129 * |
| Fax: |
2396 5067 |
| Email: | |
| Website: |
* With effect from 28 April 2008, all telephone conversations on the enquiry hotlines of the Trade and Industry Department shall be recorded to ensure service quality. The recorded conversations will be kept for 90 days. Members of the public may request for conversations relevant to them recorded in 90 days on a CD, at a charge of $50 per CD.
SME Export Marketing Fund
Businesses which are registered in Hong Kong under the Business Registration Ordinance (Chapter 310) and fulfill Government's definition of the SMEs, as follows, can apply for grant under the EMF -
SMEs must have substantive business operations
in Hong Kong. The form of SMEs' participation must be exhibitors for trade
fairs/exhibitions or delegation members for study missions. For details,
please refer to the application guide.
Only local SMEs registered in Hong Kong under the Business Registration Ordinance (Chapter 310) are eligible. In addition, an SME must have substantive business operation as registered in Hong Kong; otherwise its application may be rejected. An SME holding a shell business registration or having its main business operation outside Hong Kong will not be regarded as having substantive local business operation and hence, the relevant application may be rejected. TID reserves the right to determine whether an SME is eligible to apply for the EMF.
Only businesses carried on for the purpose of gain are eligible for applying the EMF. Hence, non-profit making companies are not eligible.
The organiser and any of its related or associated companies are not eligible for applying grant under the EMF in respect of the export promotion activities organised or co-organised by them.
The EMF provides grant to SMEs for their participation in overseas trade fairs/exhibitions and business missions, as well as local trade fairs/exhibitions which are export-oriented. Such export promotion activities must be organised by bona fide organisations/companies and directly relevant to the business of the applicants. The form of SMEs' participation must be as exhibitors of the trade fairs/exhibitions or as delegation members of the business missions.
With effect from March 2008, the scope of EMF is extended to include advertisements on printed trade publications targeting export markets, on the condition that such publications are published by bona fide exhibition organisers.
TID reserves at all times the absolute right to
determine whether the applicant's and the organiser's eligibility, the nature
of the export promotion activity (including whether the activity is export-oriented),
the relevancy of the activity to the business operation of the applicant and
the applicant's form of participation or advertisement are acceptable under
the EMF.
The objective of the EMF is to encourage and support SMEs to expand their overseas markets (including the Mainland market). In this regard, conferences, workshops and seminars that mainly aim to understand the related market development and technical solutions or for experience sharing purpose are not eligible for the EMF.
To be eligible for the EMF, the itinerary of the business mission must be able to demonstrate that it is export-oriented and provide ample opportunity for participants to meet potential overseas customers. TID will evaluate the overall attributes and initiatives of the study mission to determine its eligibility. Existence of certain key initiatives for export trade promotion may not necessarily constitute the mission itself as fulfilling the objective of the EMF. Also, an overseas trip including visiting a trade fair or exhibition, regardless of whether the details like travelling and hotel accommodation are arranged by an SME itself or made through a travel agent, would not be regarded as an eligible business mission.
TID reserves at all times the absolute right to determine whether the business mission itself is acceptable under the EMF.
Printed trade publications targeting export markets that are published by bona fide exhibition organizers. For reference examples, please see the "List of Previous Approved Activities/Trade Publications" under the section "Online Service".
Export promotion activities organised by individual SMEs are not eligible for the EMF. The reasons are -
The EMF will only subsidise advertisements on printed trade publications targeting export markets, on the condition that such publications are published by bona fide exhibition organisers. Advertisements on internet or electronic version of such trade publications are not eligible for the EMF.
Only the following expenditures incurred by SMEs in relation to their participation in the eligible export promotion activities will be subsidised by the EMF -
Relevant expenditures must be directly incurred
and fully paid by SMEs themselves in relation to their participation of
the concerned activities through their employers and/or employees. TID at
all time reserves the absolute right to determine whether the expenditures
incurred, the route of travelling, the period of stay and the involved portions
will be regarded as fundable items including the method to calculate the
amount of grant.
Successful applicants shall not be subsidised by any other local and/or overseas public funding scheme(s) [whether provided by the Government of the HKSAR] in respect of the same export promotion activity(ies). TID at all times reserves the absolute right to determine whether such a provision of fund will constitute a double benefit.
The EMF aims at helping SMEs expand their businesses through active participation in export promotion activities. In this connection, SMEs must participate directly in the export promotion activities themselves via their employers and/or employees. Participation through any other ways including third party commission will not be accepted.
TID
reserves at all times the absolute right to determine whether the applicant's
way of participation is acceptable under the EMF.
Regular trade fairs, say annual or quarterly exhibitions, held in different period of time will be regarded as individual and separate activities. An SME may submit more than one application.
The maximum cumulative amount of grant that an SME may obtain from the EMF is $100,000. For each successful application, the maximum amount of grant is 50% of the total approved expenditures incurred by the applicant or $30,000, whichever is the less.
An SME should submit the application for grant within 60 calendar days after the completion date of the concerned activity or the issue date of the trade publication containing the advertisement. Application can be submitted either in person or by post to SME Export Marketing Fund Unit, 4/F, Trade and Industry Department Tower, 700 Nathan Road, Kowloon. Please refer to the application guide for details of the application procedures and related documentary requirements.
If there is no publication date printed on the trade publication or the publisher does not inform TID of the publication date, the first day of the issue month or quarter of the trade publication will be taken as the publication date. The TID reserves all times the absolute right to determine the publication date.
TID will not accept amendments which shall constitute the original application null and void. Likewise, amendments which are tantamount to the acceptance of a fresh application are not acceptable. (e.g. change of business name, BR number and activity name, etc)
An applicant wishes to cancel its application should submit a written request to the TID to cancel its application. The application number (if available), the BR number and details of the activity (e.g. name and date) should be provided in request to facilitate the processing of the concerned application and to avoid any confusion.
Under normal circumstances, TID will complete the processing of the application within 30 clear working days from the date of the receipt of the duly completed application accompanied by all necessary documentation. Applicants are therefore reminded to ensure that applications are submitted together with all required supporting documents. Failure to do so may cause delay in processing their applications or even resulting in deferment or rejection of applications.
TID will then notify the applicant by post of the result of application with all original receipts returned. TID will arrange to send the result and the original receipts through ordinary post to the latest available address at the own risk of the applicant. Successful applicants will at the same time receive grants offered by cheques payable to them.
Late submissions will not be accepted under all circumstances. For this purpose, TID will base on the date the application is received and the end date of the relevant activity or the issue date of the trade publication containing the advertisement to determine whether the application is late. Local time will be used for all purposes regardless of whether time zone difference is involved for non-local events.
TID will base on the date the application is received and the end date of the relevant activity to determine whether the application is late. Applicants are reminded that for applications and supporting documents sent in by post, TID will not accept the responsibility for any delay and loss or damage of documents in transit. Applicants should take note of the lead-time required and the risk involved for submitting applications and supporting documents by post. In case the deadline for submission falls under Saturdays, Sundays and public holidays, applicants should ensure that their submissions are properly received by TID on the working day immediately before the due date; otherwise the submissions will be regarded as late. Moreover, local time will be used for all purposes regardless of whether time zone difference is involved for non-local events.
Incomplete applications will be deferred. TID will also require applicants to provide supplementary information or clarification by a specified date. Failure to do so by the specified deadline will constitute the applications null and void. TID may reject the long expired applications without further notice.
Only fee for production of brochure bearing names of the applicant and the concerned activity which are solely for use in the said activity is fundable under the EMF. If necessary, TID will require the applicant to provide such sample for examination purpose so as to determine whether the involved advertising fee is fundable. TID may exclude those advertising expenditure as fundable item in case the applicant fails to demonstrate that the material is solely for use in the concerned activity.
Mandatory Provident Fund (MPF) records issued by the trustees will normally suffice. Other documentary evidence (e.g. Employers: business registration and/or company registration records; Employees: salary records and/or employment contracts) will be required if they are under the exemption of the MPF.
For sole proprietorship, please provide the owner's name and other required information. In the case of partnership, please provide the required information of all the partners. For a limited company, please provide information of the individuals having 30% and/or more share holdings. If there is no individual having 30% and/or more share holdings of a company, please provide information of its directors. Applicants also need to submit documentary evidence in this regard {e.g. Certified Extract/Electronic Extract of Information on the Business Register [i.e. Form 1(a) of the BR Office] or Annual Return of the Companies Registry (i.e. Form AR1), etc}.
To ensure the proper use of public money, TID will review applications if deemed necessary. Applicants will thus be required to provide additional documentary evidence. TID will contact other third parties including the organisers of the relevant export promotion activities and the MPF trustees to verify the authentication of the information given. Failure to provide the required information may render the application being rejected.
Applications will be processed on a first-come-first-served basis according to the time and date of receipt of a complete and valid application by TID until the fund available has been exhausted. TID reserves the right to determine the priority order of each application.
No. One application form can only be used to apply for one advertisement under all circumstances. If an advertisement is printed on several issues of the same trade publication, applicant should submit an application for grant within 60 calendar days after the publication date of each issue, together with the supporting documents and original copy of the relevant trade publication, to SME Export Marketing Fund Unit, 4/F, Trade and Industry Department Tower, 700 Nathan Road, Kowloon.
No, but the readers must be able to trace the company name from the advertisement and the corresponding company must be a Hong Kong SME. Under the following circumstances, the advertisement need not contain the applicant's name and contact information:
- Applicant's name appears in the index of advertisers;
- Applicant's website address appears in the advertisement.
SME Development Fund
SDF aims at providing financial support to projects which are conducive to enhancing the competitiveness of Hong Kong SMEs in general or in specific sector(s).
Applicants have to complete an application form and lodge the application with the supporting documents to Trade and Industry Department in person, by post, or by electronic means. Please refer to "Guide to Application for SME Development Fund" for details.
The SDF is open to applications all year round. Each applicant may put in up to two applications in a quarter, which translates to a total of eight applications per year.
Non-profit-distributing organisations operating as support organisations, trade and industrial organisations, professional bodies or research institutes, which shall either be statutory organisations, or organisations registered under the laws of the Hong Kong Special Administrative Region, are eligible to apply.
The maximum amount of funding support for each approved project will be HK$2 million, or 90% of the total project expenditure (whichever is the less). The applicant organisation will have to contribute the remaining amount, which may be in cash, in kind or in the form of third-party sponsorship.
Successful applicants will be required to sign an agreement with the Trade and Industry Department which lays down the terms and conditions of the grant. To facilitate monitoring and evaluation of funded projects, successful applicants will need to hand in progress/final reports and financial reports.
The SDF Secretariat will first conduct a preliminary screening of all applications. A vetting committee comprised of experts and representatives from different sectors will assess application and formulate funding decision for each project. Where necessary, comments and advice will be sought from outside experts.
The major vetting criteria include whether there is a demonstrated need for the project, whether the project can enhance the competitiveness of Hong Kong SMEs, whether it can be of practical use to SMEs, the number of SMEs which may benefit from the funded projects, the cost-effectiveness of the approach to be adopted and the quality of the implementation plan.
The SDF Secretariat will inform applicants of the results in writing. If an application is declined, the SDF Secretariat will inform the applicant of the reasons behind the decision.
The SDF fund will be disbursed according to the schedule specified in the project agreement.
Additional manpower cost, newly purchased/leased equipment cost and other direct costs (such as external audit fee, patent registration fee) which are directly incurred for the project during the project period will be fundable under SDF.