- Business Property Financing
This loan is rolled out to those who wants to pay for acquired business premises. With this loan, you get the option to choose between fortnight installments and monthly installments for a 30-year repayment period. Upon successful application and presentation of all required documents, your loan is ready in the next working day.
- Equipment Finance
With this financing vehicle, you get to choose between hire purchase and leasing with a maximum repayment period of 5 years. This financing applies to the purchase of machines in mainland China or Hong Kong as used machines or brand-new machines payable at either floating or flat interest rates.
- Overdraft Loans
This loan type accords you the flexibility of cash withdrawal and you don’t need to apply each time. You get to pay your interest only on the extra amount.
- SME Financing Guarantee Scheme
This is a special scheme rolled out to help SMEs to the distress they are undergoing in a tough situation. No one is denied the loan, all who apply to qualify for up to 5 million Hong Kong dollars at a 2.75% interest rate paid in fixed installments that have been spread for 5 years. You can apply for this loan in two ways, either through the smart form application or apply online.
It comes in various categories: 100%, 90%, and 80% Guarantee product. For the latter, you must provide proof of a good loan repayment record. These loans are lucrative because they come at almost half the Hong Kong market rate.
The 80% Financial Guarantee Scheme has 6 months of Principal moratorium. And it comes in the options of overdrafts, installment loans, and trade finance facilities.
This loan also comes with other promotional benefits such as full subsidy in the 1st year and 50% subsidy on the second year as a guarantee fee which is usually waived by the HKMCI. Each of these temporary benefits must be applied for unless the customer is eligible for the subsidy under HKMCI.
- SME Loan Guarantee Scheme
This business loan is almost similar to the SME Financial Guarantee Scheme but there is a difference in that the Department of Trade and Industry will provide the guarantor. There are three options to go for:
- The working capital
- The business installment, or
- Equipment financing.
Beneficiaries get a maximum loan of HK$12,000,000 for a Principal moratorium period of six months. In addition to the common loan requirements, your company should be falling under the Hong Kong acceptable definition of SME, which is 100 or fewer persons for a manufacturing company and 50 or fewer persons for a non-manufacturing company.
How does flat rates interest on business loans work?
A flat rate of interest is an interest that remains the same throughout your loan repayment period as was charged at the beginning of the loan issuance. It is common to hire purchase and personal loans.
Floating interest rates, on the other hand, will be changing depending on the banks’ financial program, and most of the time the bank does not consult with the loaner.
Financial Options for Those Starting a New Business
Government funding schemes
The government is in support of businesses which are intended to improve the life of its citizen directly or indirectly and those that conserve the environment. Such Hong Kong businesses are technologically innovative ideas, e-commerce, and environment-friendly undertakings like the use of renewable energy.
Under this, we have the Youth Employment Start and the Youth Business Hong Kong. The former targets those in the range of 15 years to 29 years helping them access professional consultation towards self-employment. While the latter targets those between 18 and 35 years providing funding in four diverse ways which are: information and networking services, professional consultancy and business mentorship, seed money, and business support.
In Hong Kong, there are general business loans to which both companies small and limited can qualify. Also, the Hong Kong Special Region government has rolled out several loans aimed at supporting Small and Medium-Sized Entrepreneurs in starting and maintaining their business. These loans are offered by the major Hong Kong banks and other financial institutions.