Press Releases

Government launches a new loan guarantee scheme to help SMEs obtain working capital loans and equipment loans
Sunday, March 30, 2003

The Government will launch the new SME Loan Guarantee Scheme (SGS) on March 31 to help small and medium enterprises (SMEs) obtain working capital loans and equipment loans from lending institutions, a spokesman for the Trade and Industry Department said today (March 30).

The SGS comprises three types of loan guarantee from the Government, namely business installations and equipment loan guarantee, associated working capital loan guarantee, and accounts receivable loan guarantee. The maximum amount of guarantee an SME may receive under the SGS is $4 million, which is four times that of the SME Business Installations and Equipment Loan Guarantee Scheme (BIG).

Before the launching of the SGS, BIG provides guarantee up to $1 million per SME, or 50% of the business installations and equipment loans approved by lending institutions. The guarantee period is three years the maximum. BIG will be replaced by the SGS, which is of a wider scope.

Under the SGS, the maximum amount of business installations and equipment loan guarantee is increased to $2 million per SME, or 50% of the amount of loans approved by lending institutions, whichever is the less. The guarantee period is extended to five years the maximum.

In addition to the business installations and equipment loan guarantee, an SME may also obtain under the SGS Government guarantee to meet additional operational expenses arising from an increase or enhancement in business installations and equipment. The maximum amount of guarantee for associated working capital loans is $1 million per SME, or 50% of the co-related business installations and equipment loan guarantee, or 50% of the associated working capital loans approved by lending institutions, whichever is the less. The guarantee period is two years the maximum.

Also, an SME may obtain under the SGS Government guarantee for accounts receivable loans. The maximum amount of guarantee is $1 million per SME, or 50% of the accounts receivable loans approved by lending institutions, whichever is the less. The guarantee period is two years the maximum.

"The improvement measures aim to enhance SMEs' competitiveness by addressing their financing needs in enhancing productivity, and improving their cash flow when they extend credits to customers," the TID spokesman said.

SMEs which wish to make use of the SGS should apply through lending institutions which have participated in the scheme. The list of participating lending institutions can be obtained from the Trade and Industry Department (Trade and Industry Department Tower, 700 Nathan Road, Mongkok, Kowloon), and homepage of the SME Funding Schemes (www.smefund.tid.gov.hk).

Information leaflets are available at the Trade and Industry Department, District Offices, major SME support organisations, and all participating lending institutions.

For enquiries, please call 2398 5129.

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