Loan Guarantee Applications To Open

HKMC Insurance Ltd announced today that the Special 100% Loan Guarantee under the SME Financing Guarantee Scheme will start receiving applications from April 20.

The loan guarantee was introduced in the 2020-21 Budget to ease the cash flow problems of enterprises adversely affected by COVID-19.

Financial Secretary Paul Chan said: "In light of the prolonged impact of the COVID-19 on the economy, the second round of the Anti-epidemic Fund further enhances the Special 100% Loan Guarantee, thereby benefitting more enterprises.

“We believe the launch of the Loan Guarantee will be a timely response to the pressing needs of many enterprises."

The Special 100% Loan Guarantee is applicable to all sectors with the Government fully guaranteeing the loans.

Enterprises that have been operating for at least three months as at end-December 2019 and have suffered at least 30% decline in sales turnover in any month since February 2020 compared with the monthly average of any quarter in 2019 are eligible.

An interest rate of the Prime Rate minus 2.5% per annum will be charged and all guarantee fees will be waived.

The maximum loan amount per enterprise is the total amount of employee wages and rents for six months or $2 million, whichever is lower. If an enterprise does not have employees nor a rented office, the calculation can be replaced by half of the maximum monthly net income in 2019.

Enterprises may also apply for an optional principal moratorium for the first six months to alleviate instant burden on repayment.

Subject to funding approval by the Legislative Council Finance Committee, the maximum loan amount per enterprise will be increased to $4 million and the principal moratorium arrangement will be extended to the first 12 months.

Call 2536 0392 for enquiries.