|HK to Launch SME Financing Guarantee Scheme|
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The Hong Kong Mortgage Corporation Limited (HKMC) has announced that it will launch a guarantee scheme on January 1, 2011, to assist local small and medium-sized enterprises (SMEs) to obtain sustainable bank financing.
The SME Financing Guarantee Scheme aims to assist non-listed enterprises with business operations in Hong Kong to obtain loans from banks so as to provide general working capital for their business operations or to acquire equipment and assets in relation to their business. In order to qualify for the Scheme, firms must be at least one year old and have a good loan repayment record.
Under the Scheme, the HKMC will provide guarantee coverage on 50%, 60% or 70% of the bank financing for eligible enterprises. The maximum loan amount for each enterprise or each group of enterprises under the cover is HKD12m (USD1.5m), with both term loan and revolving credit facilities being eligible. The maximum guarantee period for each loan facility is five years, and the minimum annual guarantee fee will range from 0.5% to 2.5% of the loan facility.
The Chief Executive of the Hong Kong Monetary Authority and the Deputy Chairman of the HKMC, Norman Chan, said: "SMEs are a cornerstone of the Hong Kong economy. According to our experience in the past two years, assisting SMEs to obtain sustainable bank financing is one of the key factors that helped Hong Kong weather the global financial tsunami, which led to earlier recovery of the local economy and employment.”
“With the expiry of the government's Special Loan Guarantee Scheme,” he added, “it is timely for the HKMC to launch this new guarantee scheme which will help SMEs obtain sustainable bank financing."
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Nov.19, 2010