【ZA Bank】SME Financing Guarantee Scheme: Details and Application Guide
In recent years, many small and medium-sized enterprises (“SMEs”) have faced challenges in business operations and cash flow due to changes in the market and economic environment. The Government has also introduced various measures to enhance the SME Financing Guarantee Scheme to help SMEs ease their cash flow pressure. ZA Bank Business Banking supports eligible SMEs in applying for the SME Financing Guarantee Scheme. Let us walk you through the key details of the Scheme.
What is the SME Financing Guarantee Scheme (SFGS)?
The SME Financing Guarantee Scheme was launched by The Hong Kong Mortgage Corporation Limited on 1 January 2011 and is currently operated by HKMC Insurance Limited. The Scheme aims to help local SMEs and non-listed enterprises obtain financing to meet their business needs, and to enhance their productivity and competitiveness.
Amid prolonged economic uncertainties, the Government has also introduced several Special Concessionary Measures, under which the guarantee coverage was increased to 80% in 2012, 90% in 2019, and up to 100% in 2020.
The actual products available for application, guarantee coverage and relevant terms and conditions are subject to the latest information published by HKMC Insurance Limited.
Eligibility for the SME Financing Guarantee Scheme
SME applicants must meet the following requirements:
1. The applicant must be a limited company, sole proprietorship, partnership or unincorporated body of persons which has business operations in Hong Kong and registered under the Business Registration Ordinance (Cap. 310);
2. The applicant must not carry on the business of a lender, or otherwise provide funds available for borrowing in any way;
3. The applicant must not be an affiliate of the lending institution;
4. The applicant must not be a company or corporation which has any of its shares listed on any exchange outside Hong Kong; and
5. Except for Qualifying Guarantee applications received by the Insurer on or before 31 May 2021, the applicant must not be a company or corporation which has any of its shares listed on the Stock Exchange of Hong Kong, including the Main Board or GEM.
You may now apply for the 80% Guarantee Product under the SME Financing Guarantee Scheme through ZA Bank Business Banking:
• Application requirement: The applicant must have been operating business in Hong Kong for at least 3 years
• Application deadline: On or before the end of March 2028, subject to the latest HKMCI announcements
• Eligible loan types: Revolving loan and term loan repayable by instalments
• Maximum guarantee period: Up to 10 years, subject to the latest HKMCI announcements
• Annual guarantee fee: Up to 0.45% of the loan / credit facility limit
• Maximum loan amount: HK$18 million
Other guarantee products with different guarantee coverage may be launched or updated from time to time. Please stay tuned for the latest announcements from ZA Bank.
Loan applications are subject to the approval of ZA Bank and/or the relevant guarantee institution. The actual loan amount, interest rate, repayment period, guarantee period, guarantee fee, eligibility requirements and other terms and conditions are subject to individual application circumstances, approval results and the latest requirements of HKMC Insurance Limited.
To borrow or not to borrow? Borrow only if you can repay!