Introduction to Two SME Funds in Hong Kong Simplify Access for Businesses
Hong Kong is home to over 340,000 small and medium-sized enterprises (SMEs). These businesses make up 98% of all enterprises in the region and employ about 45% of the total workforce outside the civil service. Many of these SMEs, especially those in import and export (about 30%), face unique challenges like limited resources and regulatory complexities. The government understands these challenges and offers various funding initiatives to help SMEs. Two of the most important funds are the SME Financing Guarantee Scheme (SFGS) and the Technology Voucher Programme (TVP).
SME Financing Guarantee Scheme (SFGS): A Closer Look
The SME Financing Guarantee Scheme (SFGS) helps SMEs get loans by reducing the risk for lenders. The Hong Kong Mortgage Corporation Limited (HKMCI) provides guarantee coverage of 50%, 60%, or 70% of the loan amount, depending on the financial standing of the business. During the pandemic, the government increased the guarantee coverage to 100% and extended the repayment period to up to 7 years.
To qualify for SFGS, SMEs must be approved by lenders and show financial stability. The application process involves submitting financial statements and a business plan. SFGS makes it easier for SMEs to get financing, which helps them expand and innovate. For example, a local manufacturing company used SFGS to secure a loan and upgrade its machinery, leading to increased production and better quality products.
Technology Voucher Programme (TVP): Empowering SMEs with Innovation
The Technology Voucher Programme (TVP) helps local enterprises adopt new technologies and services. TVP provides 75% funding support for eligible projects, up to a cumulative cap of HK$600,000 per company. Each company can apply for up to 6 projects, and each project must be completed within 12 months.
Eligible projects include software deployment, data analytics, and automation solutions. To apply, businesses need to submit a detailed project proposal and budget. TVP has helped many SMEs improve their productivity and innovation. For instance, a retail company used TVP to implement a new inventory management system, reducing errors and saving time.
Dedicated Fund on Branding, Upgrading, and Domestic Sales (BUD Fund): Boosting Domestic Sales
The BUD Fund supports SMEs in branding, upgrading, and domestic sales initiatives. The government covers up to 50% of the total approved project cost, with a maximum cap of HK$1,000,000. Each company can have up to 70 approved projects, and each project must be completed within 24 months.
Eligible projects include marketing campaigns, product upgrades, and sales strategies. To apply, businesses need to submit a detailed business plan and marketing strategy. The BUD Fund has helped many SMEs enhance their domestic market presence. For example, a local food company used the BUD Fund to launch a new product line and increase its market share.
SME Export Marketing Fund (EMF): Supporting International Expansion
The SME Export Marketing Fund (EMF) helps SMEs with their export marketing efforts. The government offers funding support of up to 50% of the total approved project cost, with a maximum cap of HK$1,000,000. Each project must be completed within 24 months.
Eligible projects include trade missions, international exhibitions, and market research. To apply, businesses need to submit a detailed project proposal and market analysis. The EMF has helped many SMEs expand their international presence and increase exports. For example, a technology company used the EMF to attend an international trade fair and secure new clients.
Appendix: Additional Funding Initiatives for Hong Kong SMEs
- Innovation and Technology Fund (ITF): Supports research and development projects.
- Enterprise Support Scheme (ESS): Helps SMEs in various aspects of business operations.
- CreateSmart Initiative (CSI): Promotes innovation and creativity in the SME sector.
- Tender Award Grant Scheme: Provides funding for successful tender awards.
- SME Loan Guarantee Scheme: Offers loan guarantees to help SMEs get financing.
For more information on these initiatives, visit the Hong Kong Trade and Industry Department’s website. You can also contact BCorpsec Limited at (+852) 8192 8666, located at Office 3906, 39th Floor, The Center, No. 99 Queen’s Road, Central, Hong Kong. Their business registration number is 75202887.
Industry News & Insights
Stay updated on the latest developments in SME funding by subscribing to our newsletter. We provide expert analysis, success stories, and industry trends. For more resources, check out industry reports and government publications.
