SMEs in Hong Kong to receive financial support
In a bid to ease the financial burden faced by SMEs in the country, the Hong Kong government has moved to double the maximum amount of loans eligible firms can apply for, while the repayment period has been extended by two years.
Under the SME Financing Guarantee Scheme launched by the Hong Kong Mortgage Corporation in 2011, SMEs are able to gain access to loans amounting to employee salaries and rents for 12 months – as compared to the previous period of six months – or HK$5 million (US$645,160), whichever is lower.
The maximum repayment period for loans under the scheme has also been increased to five years from three, while the size of the loan commitment will rise from HK$50 billion (US$6.4 billion) to HK$70 billion (US$9 billion).
HKMC Insurance, a wholly-owned subsidiary of the Hong Kong Mortgage Corporation, said, “Borrowers with existing loans under the Special 100% Loan Guarantee can apply to their lending banks for increasing the loan amount and/or extending the repayment period if they deem appropriate, and in general no additional supporting documents will be required.”
Hong Kong’s economy contracted by 9% in the second quarter of 2020, extending a recession for four straight quarters, as the government continues gradually lift restrictions across the country.
Beginning September 18, bars, swimming pools and theme parks will reopen, after gyms and entertainment venues were earlier allowed to do. However, the ban on gathering of more than four people remains in place, as does a ban on people visiting public beaches.