The Trade and Industry Department on March 31 launched a new SME Loan Guarantee Scheme to more comprehensively meet the financing needs of small- and medium-sized enterprises (SMEs).

The SME Loan Guarantee Scheme (SGS) comprises three types of loan guarantee from the government: business installations and equipment loan guarantee; associated working capital loan guarantee; and accounts receivable loan guarantee. The maximum amount of guarantee an SME may receive under the SGS is HK$4 million. This is four times that of the former SME Business Installations and Equipment Loan Guarantee Scheme (BIG), which has been replaced by the SGS. The new scheme also provides a wider scope.

Under the SGS, the maximum amount of business installations and equipment loan guarantee is increased to HK$2 million per SME, or 50 percent of the amount of loans approved by lending institutions, whichever is less. The guarantee period is extended to a maximum of five years.

In addition to the business installations and equipment loan guarantee, an SME may also obtain, under the SGS Government guarantee to meet additional operational expenses arising from an increase or enhancement in business installations and equipment. The maximum amount of guarantee for associated working capital loans is HK$1 million per SME, or 50 percent of the co-related business installations and equipment loan guarantee, or 50 percent of the associated working capital loans approved by lending institutions, whichever is the less. The guarantee period is a maximum of two years.

Also, an SME may obtain under the SGS Government guarantee for accounts receivable loans. The maximum amount of guarantee is HK$1 million per SME, or 50 percent of the accounts receivable loans approved by lending institutions, whichever is less. The guarantee period is a maximum of two years.