• Business Loans in Hong Kong

Loans are a great contributor to financial support when starting a business. They do not only boost startups but also enable the businesses that have been launched to operate smoothly by offering them additional finances.

Common Business Loan Requirements

  • Your business should be registered in Hong Kong for a certain period according to the loan type.
  • You need a copy of the company incorporation certificates.
  • You need copies specific to your business structure e.g., sole proprietors need Form 1A.
  • Copy of Passport or Hong Kong Identity Card.
  • Bank documents and statements.
  • Loan guarantors.
  • A signed guarantee by the owner of the company or its director.
  • Notice of Assessment given by the tax authorities.

Types of Loans

  • Corporate Tax Loans
    Corporate Tax Loan helps you pay your corporate tax when your cash flow is low. In this way, it enables you to divert the little you have to critical business needs. It is rolled out to Small and Medium-Sized Entrepreneurs (SMEs).
  • Business Instalment Loan
    Unlike other loans in which you use an asset as a guarantee, you do not need an asset to access Business Instalment Loan. You can loan up to one million five hundred Hong Kong dollars. There is a fixed installment repayment-agreement for up to 5 years. Also, the loan approval process is extremely fast, in less than 30 minutes. This loan is mainly given to Small and Medium-Sized Entrepreneurs (SMEs), not listed companies.
  • Business Integrated Account Secured Credit Facility
    This loan is given based on the calculated worth of your business assets through your business integrated account. You do not need to reapply each time because the credit limit is calculated and adjusted per the current value of your asset account. Even though this loan is based on your asset account, the assets in your account can still be freely traded and used for trade finance and overdraft. For the sake of interest rates, assets with lower interest rates are attached first and others follow in ascending order.
    In addition to the other bank requirements, you will need a charge over deposits and accounts if you are a limited company.
  • InnoTech Business Instalment Loan
    This loan is rolled out for financing businesses associated with digital innovations and those involved in electronic commerce. It aims to promote the adoption of technology in the business sector.
  • Commercial Lending
    This loan helps businesses in improving their cash flow, plan their business growth, and cover their expenses.
  • Profits Tax Loan
    Profit tax loan does not require you to give an asset as collateral neither does it require financial statements. You are to repay over 18 months at a floating interest rate or a flat monthly rate. It is rolled out for SME company owners whose companies are registered in Hong Kong. Only companies with all owners living in Hong Kong will are considered for this loan.
  • Sustainable Financing Program
    Your business will qualify for this financing scheme if the business is environment focused. It is rolled out to benefit those who are adopting an ecological method of business operation and investing in which are friendly to the ecosystem which eventually reduce carbon emission. The beneficiaries of this loan get to choose which options their needs from between hire purchase, loans, or leasing of at least HK$1,000,000 repaid within five years. This eco-friendly financial assistance can cover up to 100% of the machine’s purchase price. Your company will be assessed by the Business environment Council for environment-friendly plans and undertakings.

    • Requirements
      In addition to the common loan requirements, the following applies to this loan type:

      • Be the purchaser of machines that will result in carbon emissions during their operation.
      • Your energy source is one that is renewable or with less carbon emission.
      • Your machine should be one that saves energy

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  • 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:

    1. The working capital
    2. The business installment, or
    3. 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.

  • Youth Entrepreneur

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.

What Business Loans are available in Hong Kong? FAQs

What Hong Kong business loans are available for SMEs?2021-02-17T02:20:00+00:00

Business loans that are available for SMEs in Hong Kong are unsecured loans, SME Financing Guarantee Schemes, Business installment loans, loans for those trading in finance and financial services, overdraft loans, mortgage, equipment loans, etc..

What financing alternatives does Hong Kong have to business loans?2021-02-17T02:19:38+00:00

The financing alternatives of Hong Kong are traditional loans, letter of credit, accounts receivable financing, and supply chain.

What do banks look at before issuing loans to startups?2021-02-17T02:19:21+00:00

Most banks will look at security, previous business operational success, the credit history of your business, and whether your business consists of a good amount of personal money investment before issuing loans to startups

Are there funding services for professional consultation regarding business loans in Hong Kong?2021-02-17T02:18:09+00:00

Yes, there are youth entrepreneurial services like the Youth Employment Start and the Youth Business Hong Kong which provides professional consultancy to young people.

We also have SUCCESS (Support and Consultation Centre for SMEs) which provides detailed information regarding the drafting of a business plan, costing, and market information hence enabling startups to make informed decisions. And loaning services like Money Hero, CompareAsiaGroup, and Oriente among others.

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