Hong Kong extends loan programmes for businesses

Hong Kong will be extending its government-backed loan schemes by six months to support businesses during the pandemic, Chief Executive Carrie Lam said.

The loan programmes that will be extended are the Special 100% Loan Guarantee, the SME Financing Guarantee Scheme and the Preapproved Principal Payment Holiday Scheme.

“Some industries are still suffering, especially in terms of cash flow, even though there have been signs of economic recovery,” Lam said at a press briefing, reports the South China Morning Post. “Borrowers of these three schemes will have relief, because the schemes will be extended for six months.”

So far, the schemes have granted a total of HK$170 billion (US$21.8 billion) in loans to 67,000 applicants, which include 41,600 companies that employ 610,000 people.

The SME Financing Guarantee Scheme offers three loan products in which 80, 90 or 100% of the funds are guaranteed by the government, which means “companies will be only required to repay interest, not principal, for up to 24 months,” said Lam.

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The Special 100% Loan Guarantee allows permanent residents without jobs to borrow up to HK$80,000 (US$10,270), or six times the average monthly income, at an annualised 1% interest rate, with a repayment period of six years.