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SME Loan Guarantee Scheme (SGS) Finance FAQs
SME Loan Guarantee Scheme (SGS) Finance FAQs
Q1:
A1:
What is "SME Loan Guarantee Scheme (SGS)?
SME Loan Guarantee Scheme is a loan guarantee scheme launched by the Government aims to help small and medium enterprises (SMEs) to secure loans from participating lending institutions and banks (PLIs) for acquiring business installations and equipment and meeting working capital needs.

Q2:

A2:
Whether the Government or the bank lends the loans to customers?
All approved loans were guaranteed by the Government and lent by the bank to customers directly.

Q3:
A3:
Who are eligible to apply for the loans?
SMEs that are registered in Hong Kong under the Business Registration Ordinance (Chapter 310), except lending institutions and their associates, i.e. any manufacturing businesses which employ fewer than 100 employees in Hong Kong; or any non-manufacturing businesses which employ fewer than 50 employees in Hong Kong. In this connection, "business" refers to any form of trade, commerce, craftsmanship, professional, calling or any activity carried on for the purpose of gain, but shall not include any club, except a club within the meaning of the Business Registration Ordinance which provides services for the purpose of gain.

Q4:
A4:
Can newly established company apply?
Yes.

Q5:

A5:
If the applicant has other corporate finance from other lending institutions, is it still eligible to apply?
Yes.

Q6:




A6:
If the applicant has successfully applied for either the Business Installations and Equipment Loans (BIE) / Associated Working Capital Loans (AWC) / Accounts Receivable Financing (ARF))/ Working Capital Loan (WCL), is it eligible to apply the other type(s) of facility under SGS?
SMEs which has successfully applied for the Business Installations and Equipment Loans (BIE) / Associated Working Capital Loans (AWC) / Accounts Receivable Financing (ARF)/ Working Capital Loan (WCL), can also apply the other type(s) of facility under SGS as far as the aggregated loan amount does not excess HK$12 million.

Q7:
A7:
Is there any restriction on the usage of loans?
Yes. It depends on which type of loans you apply for.

SGS - BIE
Only be used for acquiring business installations and equipment relating to the applicants' business operation within or outside Hong Kong, including:
- Machinery
- Tools
- Computer software and hardware
- Communication system
- Office equipment
- Transport facilities
- Furniture
- Fixture (e.g. air-conditioning system, built-in cabinets and lighting system, but shall exclude decoration works).

SGS - WCL
For meeting the working capital needs of SMEs.

Q8:
A8:
What documents should be prepared by the applicant?
Applicant should submit the following documents:
1. Copy of Business Registration Certificate
2. Copy of Certificate of Incorporation (only applicable for Limited Company)
3. Memorandum and Article of Association (only applicable for Limited Company)
4. Quotation / Proforma Invoice / Invoice of the installations and equipment to be purchased (applicable for application under SGS – BIE only)
5. Financial Statements / Tax Return
6. Bank Statements / Passbooks (past 6 months)
7. Personal identity documentation of applicant / director(s) / guarantor(s)
8. Residential address proof
9. Application form of BIE / WCL(Can be obtained from PLI or Trade and Industry Department (TID)
10. Application form of SGS(Provided by OCBC Wing Hang)

Q9:
A9:
Is there any handling fee?
Yes. The Bank will charge 0.5% of the approved loan amount (minimum HK$2,000) of each loan as handling fee.

Q10:

A10:
How to repay the loan? Do we need to open an account in your bank?
If applicant applies BIE / WCL, customer has to open an account with the Bank for monthly direct debit repayment purpose (Note: the first repayment date must be arranged within one month from the loan draw down date and repayment thereafter will be made monthly on the same date).

Q11:

A11:
Are the monthly repayment amount fixed? Can it be adjusted by the applicant during the repayment period?
Basically, the loan amount is constant but it may be subject to change due to the fluctuation of the interest rate. However, applicant cannot adjust the amount by himself / herself.

   
 
   
 
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To borrow or not to borrow?
Borrow only if you can repay!