Hong Kong authorities will provide more support for small and medium-scale enterprises (SMEs), which have been hit by global economic weakness and deteriorating local business environment.
The government has unveiled a fresh round of relief measures that will make it easier for SMEs to gain access to funds for their operations and repay loans, the Hong Kong Economic Journal reports.
This is the second time in a month that the administration under Chief Executive Carrie Lam Cheng Yuet-ngor has tried to help SMEs face challenges amid the ongoing social unrest and slowing global economy.
On Aug. 15, it announced a financial package worth HK$19.1 billion to support businesses and safeguard jobs, as well as offer relief to households and individuals.
A new relief measure will be introduced for the 80% Guarantee Product under the SME Financing Guarantee Scheme (SFGS), which is implemented by HKMC Insurance Ltd., a wholly-owned subsidiary of the Hong Kong Mortgage Corporation (HKMC).
SME borrowers may apply to their lenders under the SFGS for a moratorium on the payment of principal for up to six months, which is renewable but subject to a maximum of 12 months in total.
During the period, only interest payments have to be made, according to a government press release issued on behalf of the Hong Kong Monetary Authority.
The new measure is applicable to both existing and new SME borrowers under the SFGS.
Financial Secretary Paul Chan Mo-po said on Wednesday the HKMC will also introduce a 90 percent guarantee scheme that offers up to HK$6 million in loans to startups with a repayment period of five years.
The existing requirement for startups to have at least one-year operating experience will be waived, and they will not be required to submit audited financial statements, Chan said at a press conference unveiling the measures.
Secretary for Commerce and Economic Development Edward Yau Tang-wah told the same press conference that there are currently more than 40 funding schemes offered by various departments, with an aggregate amount exceeding HK$35 billion.
Yau said that the government hopes to simplify application procedures for these schemes.
Starting from October, the four SME centers under the Trade and Industry Department, Hong Kong Trade Development Council, Hong Kong Science and Technology Parks, and Hong Kong Productivity Council will be linked so they can provide one-stop service for enterprises applying for the funding schemes, he said.
Chan said: “The global economic outlook is darkened by heightened uncertainties, and the Hong Kong economy is facing significant downward pressure.”
As such, the new relief measures can provide timely help for SMEs to ease their cash flow pressures, he said.
Welcoming the latest support package, Aron Harilela, chairman of the Hong Kong General Chamber of Commerce, said allowing small businesses with liquidity problems to make interest payments first before paying the principal of their loans will no doubt provide relief for hard-pressed businesses.
Peter Lam Kin-ngok, chairman of the Hong Kong Trade Development Council, pledged to fully cooperate with authorities to implement the new relief measures.
– Contact us at [email protected]