Guide to Hong Kong Government Funding Schemes for SMEs - 2020 | Article – HSBC VisionGo

In this article, we break down some of the Hong Kong Government’s most popular schemes financing schemes for SMEs.

Startups  ·    ·  7 mins read

Entrepreneurs and small business owners often note how the lack of financing opportunities inhibits their business growth. This in turn, makes it more difficult for them to fully capitalise on profitable business opportunities. 


Fortunately, the Hong Kong Government has repeatedly acknowledged and expressed their commitment to supporting SMEs in Hong Kong and have launched various funding schemes accordingly. In this article, we break down some of the Hong Kong Government’s most popular schemes financing schemes for SMEs.


1. Technology Voucher Programme (“TVP”)

TVP is launched by the Hong Kong Innovation and Technology Commission to help support local Hong Kong enterprises / organisations in using technology services and solutions to improve their productivity, or to help them upgrade or transform their business processes. 


Successful applicants will receive funding for approved projects on a 3 (government):1 (applicant) matching basis. TVP accepts applications for funding all year round, with up to 6 projects being accepted per applicant.


    Maximum Funding Amount:

  • HKD 600,000


    Funding Type:

  • Matching basis


    Funding Scope:

  • Technology consultancy for the purpose of receiving recommendations for technological services / solutions to be adopted

  • Purchase, rental or subscription of customised equipment/hardware, software and technological services or solutions that form an essential part of the project

  • Purchase, rental or subscription of off-the-shelf/readily available equipment/hardware, software and technological services or solutions that form an essential part of the project

  • Project auditing for projects with approved funding exceeding HKD 50,000


    Eligibility Requirements:

  • Applicants must be registered in Hong Kong, under the Business Registration Ordinance; or

  • Incorporated and registered in Hong Kong under the COmpanies Ordinance; or

  • Established in Hong Kong by the relevant ordinances as statutory bodies; and

  • Not a listed company in Hong Kong and not a government subvented organisation or subsidiary or any government subvented organisation; and

  • Has substantive business operations in Hong Kong, related to the project under application


Having worked with various IT vendors and consultants on the implementation of TVP projects, the FastLane Group could advise how to draft a successful TVP application. Please feel free to contact the FastLane Group for assistance!


2. Dedicated Fund on Branding Upgrading and Domestic Sales (“BUD”)

BUD is a Hong Kong government program that provides funding support to Hong Kong companies to undertake projects aimed at developing their brand, upgrade and restructure their business operations and to promote sales in other markets. 


Maximum Funding Amount:

  • HKD 1,000,000


    Funding Scope:

  • Salary of additional manpower and the applicant’s existing staff deployed on the project

  • Costs related to procuring or leasing additional equipment for implementing the project

  • Implementation fees paid to agents who are assisting the applicant in carrying out the project

  • Other direct costs incurred for the project, such as expense for consumables, external consultancy fees, traveling expenses, external audit fees and patent registrations 


Financing Type:

  • Subsidy


    Eligibility Requirements:

  • Non-profit organisations (those which do not distribute profits to directors, shareholders, employees or any other persons)

  • Applicants should be either a statutory organisation or organisations registered under the laws of Hong Kong


3. SME Export Marketing Fund

The SME Export Marketing Fund is designed to help Hong Kong SMEs expand their operations to markets outside Hong Kong. This is done through the provision of funding support to help Hong Kong SMEs participate in export promotion activities.


Recently, this scheme has also been expanded to include SMEs participation in virtual exhibitions. However, all export and promotion activities / platforms that are under this funding scope must be organised and operated by groups with a good track record.


Potential applicants may consult with the Hong Kong Trade and Industry Department for advice on whether a particular export or promotion activity is covered under the scope of the SME Export Marketing Fund.

    

    Maximum Funding Amount:

  • HKD 100,000 or 50% of the approved expenditure incurred, whichever is less


    Financing Type:

  • Subsidy


    Funding Scope:

  • Trade fairs / exhibitions outside Hong Kong

  • Business missions outside Hong Kong

  • Local trade fairs / exhibitions which mainly target markets outside Hong Kong

  • Placing advertisements on trade publications which mainly target markets outside Hong Kong

  • Export promotion activities conducted through online platforms and which mainly target markets outside Hong Kong

  • Setting up, or upgrading a corporate website / mobile application of the applicant which mainly targets markets outside Hong Kong


    Eligibility Requirements:

  • Applicant must be registered in Hong Kong under the Business Registration Ordinance

  • Must meet the Hong Kong Government’s definition of an SME

  • Must have substantive business operations in Hong Kong during time of application

  • To the extent the applicant has previously received funding support under this program, the cumulative amount of funding received cannot exceed thee prevailing cumulative funding ceiling of HKD 800,000

  • Must not be the organiser / co-organiser / service provider or a related company of the organiser / co-organiser / service provider of the export promotion activity


4. SME Financing Guarantee Scheme (“SFGS”)

SFGS was started by the Hong Kong Mortgage Corporation Limited with the intention of helping SMEs and non-listed companies obtain financing from Hong Kong’s various lenders by acting as the guarantor for potential loans. 


Maximum Aggregate Guaranteed Amount:

  • 50% / 60% / 70% Guarantee Product: Unlimited

  • 80% Guarantee Product: HKD 100 billion

  • 90% Guarantee Product: HKD 33 billion

  • Special 100% Loan Guarantee: HKD 50 billion


Financing Type:

  • Loan guarantee


    Funding Scope:

  • SMEs and non-listed companies who are approved under SFGS are obligated to use this funding to meet their business needs, in order to increase their company’s productivity and overall competitiveness.


    Eligibility Requirements:

  • Applicant must be a company, sole proprietorship, partnership or unincorporated body of persons which has business operations in Hong Kong and remains registered under the Business Registration Ordinance

  • Does not carry on the business of a lender or otherwise provides funds available for borrowing

  • Is not an affiliate of the Lender; and

  • Shall not be a company or corporation which has shares listed on the Hong Kong Stock Exchange or any similar exchange in or outside of Hong Kong


5. SME Loan Guarantee Scheme

Under the SME Loan Guarantee Scheme, the Hong Kong Government will act as the guarantor for individual SMEs to help them obtain loans from participating lending institutions. The difference between this scheme and SFGS is that loans obtained under the SME Loan Guarantee Scheme must be used for acquiring business installations and equipment, or for helping meet the company’s working capital requirements in relation to their daily business operations.


The installation and equipment purchased may be located outside of Hong Kong and may also be used for second-hand purchases. 


    Maximum Funding Amount:

  • HKD 6,000,000


    Financing Type:

As financing is structured as a loan guarantee, the loans obtained must be structured as the following:

  • Business Installations and Equipment loans must be in the form of either a non-revolving loan or a hire purchase agreement

  • Working capital loans must be in the form of a non-revolving loan


    Funding Scope:

  • Machinery

  • Tools

  • Computer software and hardware

  • Communication systems

  • Office equipments

  • Transport facilities

  • Furniture

  • Fixtures


    Eligibility Requirements:

  • Applicant must be registered under the Business Registration Ordinance and with substantive business operation in Hong Kong

  • Is an SME under the definition of the Hong Kong Government

  • Is not an associate of the lender; and

  • Is not carrying on the business of a lender


6. Trade and Industrial Organisation Support Fund (“TSF”) 

TSF provides financial support to non-profit-distributing organisations to implement projects which aim at enhancing the competitiveness of non-listed Hong Kong enterprises in general or in specific sectors.


Funding scope extends to all projects (except activities which are or will be in receipt of other Government funding support) that will enhance the competitiveness of non-listed Hong Kong enterprises.


Maximum Funding Amount:

  • HKD 5,000,000


Financing Type:

  • Grant


    Funding Scope:

  • Salary of additional manpower and the applicant’s existing staff deployed on the project

  • Costs related to procuring or leasing additional equipment for implementing the project

  • Implementation fees paid to agents who are assisting the applicant in carrying out the project

  • Other direct costs incurred for the project, such as expense for consumables, external consultancy fees, traveling expenses, external audit fees and patent registrations 


    Eligibility Requirements:

  • Non-profit organisations (those which do not distribute profits to directors, shareholders, employees or any other persons)

  • Applicants should be either a statutory organisation or organisations registered under the laws of Hong Kong


7. Microfinance Scheme

This scheme is a collaboration between the Hong Kong Government, several Hong Kong banks and various non-government organisations. The purpose of this scheme is to help SMEs and entrepreneurs who face difficulty in obtaining funding due to a lack of assets which can be used as collateral, and the lack of a business track record.


The aim is to provide assistance to assist people who wish to start a business, become self-employed or achieve self-enhancement through training, upgrading of skills or obtaining professional certification. 


Maximum Funding Amount:

  • HKD 300,000


Funding Type:

  • Loan


    Funding Scope:

  • There is no restriction on the applicant’s business nature or entity and their use of funds, as long as the applicant intends to use the loan for the purposes of starting a business, becoming self-employed, self-enhancement through training, upgrading of skills or obtaining professional certifications 


    Eligibility Requirements:

  • Hong Kong residents of 18 years old or above, with no bankruptcy order or proceedings

  • Both new and existing businesses (shorter than 5 years of establishment)

  • No restrictions on the applicant’s business nature or industry


8. Distance Business Programme (“D-Biz”)

The Innovation and Technology Commission has launched this initiative as a response to the new trend of remote working during COVID-19. This initiative aims to support and encourage companies to embrace a remote working business model. 


D-Biz will not only cover the relevant training expenses for employees in their transition to remote working, but will also help fund the adoption of various IT solutions, such as the adoption of digital payments, cloud-based financial management systems and virtual team management and communication tools. However, please note that funding obtained through this scheme can only be utilized to engage approved D-Biz IT service providers.


Maximum Funding Amount:

  • HKD 300,000


    Funding Type:

  • Subsidy


    Funding Scope:

  • Online business solutions

  • Online order taking and delivery, and smart self-service systems

  • Online customer services and engagement

  • Digital customer experience enhancement

  • Digital payment / mobile point-of-sale

  • Online / cloud-based financial management systems

  • Online / cloud-based human resource management systems

  • Remote document management, cloud storage and remote access services

  • Virtual meeting and conference tools

  • Virtual team management and communications

  • Cybersecurity Solutions

  • Other online / custom-built / cloud-based business support systems


    Eligibility Requirements:

  • All private enterprises with a valid Business Registration Certificate or a Social Enterprise Certificate issued by the Hong Kong Council of Social Service under the D-Biz program

  • Hong Kong enterprises with substantive business operations in the industry related to the project



Special Considerations

Due to the unique circumstances surrounding COVID-19, the Hong Kong Government announced on 20 August 2020 that the government employees work-from-home (“WFH”) arrangements will continue for the time being. 


As such, due to the WFH arrangements and considerable increase in the number of funding applications and enquiries, it can be expected that the processing time for applications will increase.


Entrepreneurs and small business owners do not have to be concerned about being unable to secure financing as Hong Kong has plenty of options available. Regardless of what industry you are in, or what specific goals you want your financing to help you achieve, the Hong Kong Government’s dedication to helping SMEs show there are plenty of solutions available for each special circumstance.


Financing is always a topic of interest for SMEs and we at FastLane support the Hong Kong Government’s dedication to helping Hong Kong businesses in this aspect. Having worked with various IT partners and having consulted on the implementation of TVP projects, the FastLane Group is happy to assist you in any way we can. Whether you are looking to learn more about the various financing schemes available or are seeking advice on project implementation, please feel free to contact the FastLane Group!

Fastlane Group
Fastlane Group