Chamber in Review
Financial Life Raft for SMEs
Financial Life Raft for SMEs<br/>中小企業財政紓困措施

Financial Life Raft for SMEs<br/>中小企業財政紓困措施

Lionel Ng

Hong Kong’s major financial institutions have rolled out a range of measures to support local businesses through the current crisis. To help members understand what is available, the Chamber organized two online sessions – in Cantonese and English – to discuss the various options.

At the English webinar on 20 March, Lionel Ng, Assistant Vice President, SME Financing Guarantee Scheme Operations at HKMC Insurance Limited, introduced this scheme, which has been running for several years. When it was launched in 2012 it offered an 80% guarantee and required businesses to have been in operation for one year. The criteria have since been relaxed, and in his February Budget the Financial Secretary announced the HKMCI special 100% guarantee product. 

“This measure aims to alleviate the burden of paying employee wages and rent. The product is applicable to all SMEs, not just those most affected,” Ng said.

The maximum loan amount will cover wages and rent for six months, up to $2 million. The application process is quite simple, he added, and those that qualify can expect to be approved fairly quickly.

Ng then shared an example: “One borrower was the owner of an education centre, with one year of business operating history and four employees, who had tried to apply for a personal loan but could not provide collateral. The owner successfully applied for a 90% loan with an interest rate below 6%.”

Winnie Tung, Managing Director & Head of Business Banking, Retail Banking, Hong Kong at Standard Chartered, explained that the bank had extended its principal moratorium scheme to all existing customers. Already, the bank had processed a number of these applications as well as loan deferments, she said.

Recognising that the principal moratorium may not be enough for some clients, the bank also offers tailored repayment plans. Tung said that it was important to understand the needs of the bank’s different customers.

“We have dedicated people to talk to the clients specifically to see how we can help customers through this difficult period,” she said.

Besides deferring loan payments, the bank has introduced some plans for other customers, Tung added.

“We also understand there are a lot of start-ups, so aside from lending we are also offering the waiver of account maintenance fees until the end of the year.”

Paul Yeung, Managing Director, Sales and Client Coverage, Business Banking, Commercial Banking Hong Kong, at HSBC, remarked that the bank had seen a lot of ups and downs during its long history in Hong Kong. 

He explained that measures already being offered amid the trade war tensions and protests included the subsidy of some fees and rebates on certain services. The funding introduced by the Government to deal with the coronavirus has allowed the bank to come up with more schemes, he said: “With these measures we have been more creative, because this is a situation Hong Kong has not faced in more than 30 years.” 

Yeung added that helping businesses to save money was just one aspect.

“SMEs need help not only on finance alone, but also in working from home,” he said. “We are doing a lot to help our customers to stay healthy and work in a digital manner, for example through enhanced business functionality and mobile banking.” 

He added that Hong Kong SMEs are very dynamic, and when economies change, many companies quickly adapt their own business models.

“I have never seen anything like this before,” said Amos Chan, Head of Business Banking, Hang Seng Bank. “It is a perfect storm for businesses, with seven months of social unrest and now the coronavirus.” 

But he said that Hang Seng hoped to act as a “buddy” to help small businesses through the crisis that was now affecting businesses in all sectors. 

To give useful and immediate relief, Hang Seng has introduced a principal payment moratorium for its existing customers.

“For example, one customer is a restaurant chain with 20 outlets, so you can imagine the problems they have had with weddings and events being cancelled,” Chan said. “Principal moratorium is a big help to them as they can save more than $2.5 million in cash flow.” 

He added that for other customers, trade loans can be extended, and further help includes fee waivers and business loans.

“Even if you are not already a customer, we can still help through new loans including through the Government schemes such as SFGS.”