Your Guide to Applying for the SME Financing Guarantee Scheme



  • The 100% Guarantee Loan provides companies with up to HK$4 million to pay rents, wages and immediate costs. 
  • The 80% and 90% Guarantee Loans provide funds to use for business investments, such as commercial property, equipment and rents. 
  • Application approval is decided by banks based on many factors, including the details reflected in accounts and financial statements.


On March 20th, 2020, the Legislative Council approved funding for a special 100% loan guarantee through the Hong Kong Mortgage Corporation Limited’s (HKMCL) SME Financing Guarantee Scheme (“SFGS”) . Applications are open now, and the application period is between April 2020 and August 2021.




Companies should be based in Hong Kong and registered locally under the Business Registration Ordinance are eligible to apply for the loan if they are considered a Small or Medium Enterprise. Under Hong Kong law, a Small and Medium Enterprise is defined as a manufacturing company with 100 employees or fewer employees, or a non-manufacturing enterprise with 50 or fewer employees. Publicly listed companies can apply for the 80% and 90% guaranteed loans over the next one year.


Interest Rates


The Special 100% Guarantee Product has an annual interest rate set at 2.5% below the prime lending rate, which is currently 2.75%. The 80% Guaranteed Loan has an interest rate of 10% per annum while the 90% Guaranteed Loan interest rate is set at 8% per annum for companies that have operated for more than three years, and 10% per annum for companies that have operated for less than three years. In practice, interest rates for the 80% and 90% guaranteed loans will vary depending on the bank. For the 80% and 90% Guaranteed Loans HKMC is providing a subsidy of the loan interest rate minus 2.75% with a 3% cap over a one year period.


Applying for the Special 100% Guarantee Product


Unlike the 80% and 90% Guaranteed loans, the Special 100% loan is not open to listed companies. The loan’s guaranteed coverage period spans three years and approved borrowers can access a maximum of HK$4 million, or the total overhead cost of rent and wages for 6 months. The company may opt for a postpone payment of principle for the first 12 months. Funds disbursed under the Special 100% Guarantee Loan should only be used for wages, rents and immediate business operations requirements. Companies are prohibited from using the funds to repay pre-existing debts.


Applying for the 80% and 90% Guarantee Product


The 80% guarantee product is open to applications from companies registered locally with business operations in Hong Kong. Companies applying for the 80% guarantee product should have at least one year of business operations in Hong Kong, as of the date of application. Disbursed funds may be used to purchase equipment or assets, including commercial property, machinery and equipment, but cannot be used to refinance or pay back any other debts. The 80% guaranteed loan grants a maximum of HK$ 15 million while the 90% guaranteed loan grants a maximum of HK$6 million.


Application Procedure


Companies should apply to one of the 31 participating banks and obtain approval. The bank will then prepare and complete application forms and paperwork along with the company and submit the full documentation to the Hong Kong Mortgage Corporation Insurance Limited (HKMCI).


Under the Normal Approval Route, HKMCI will issue a notification of result to the bank within 3 business days. Successful applicants will receive documents to sign from the bank, which will be submitted to the HKMCI in order to receive the official guarantee. Finally, the bank collects the Guarantee Fee if the company has applied for any of the Guarantee Loan products other than the Special 100% Loan, or deducts it from the received funds. If the company has applied for the special 100% Guarantee loan, they will not be required to pay any guarantee fee.


Required Documents:


  • Business Registration Certificate
  • Bank Statement
  • Up-to-date Audited Accounts
  • Up-to-date Financial Statements
  • Completed Application forms (to be obtained from banks)


Companies that have been operating for less than 18 months have to provide their Business Registration Certificate and proof of the date of establishment, along with their accounts.


Important Considerations for Hong Kong companies:


With the program’s current funding of HK$50 billion, only 12,500 companies would be able to obtain a 100% Guaranteed loan worth HK$4 million. The level of granular detail and context in a company’s accounts and financial statements makes a considerable difference in the likelihood of approval, considering the volume of applications.


In some cases, applying for the 80% or 90% guaranteed loan may be an appropriate course of action. Depending on the circumstances, for some companies taking on additional debt may not be the ideal course of action at this time.


Our Audit and Assurance team can help prepare your financial statements if you are interested in applying for one of the Guaranteed Loans. We can also help to advice on the application procedures and prepare the documents required for the application. Feel free to liase with us anytime regarding to your question regarding to applying for the SFGS or other government funding and grant program.


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