Hong Kong SMEs expect little relief from government’s HK$1 trillion Covid-19 funding support
- Starting Monday, the Hong Kong government will guarantee 100 per cent of loans of up to HK$4 million made to SMEs
- Personal guarantees by company directors, eligibility could limit impact
Four in every 10 small and medium enterprises (SMEs), which employ about 45 per cent of non-government employees in Hong Kong, expect their earnings to plunge by 75 per cent over the next year, according to a survey.
A poll conducted by Phil Aldridge, who chairs the SME and Start-up Committee for the British Chamber of Commerce in Hong Kong, this month found that about 40 per cent of the 350 companies covered expected their revenue to fall by 75 per cent or more because of the Covid-19 outbreak. More than 60 per cent said they were very dissatisfied by the government support measures. When asked what they wanted from the government most of all, more than 40 per cent said they wanted a grant scheme rather than a loan scheme.
It, therefore, does not come as a surprise that the sector was uncertain about relief from the HK$1 trillion (US$129 billion) of lending support offered by the city’s government to battle the coronavirus outbreak’s economic fallout.
Starting Monday, the Hong Kong government will guarantee 100 per cent of loans of up to HK$4 million made to SMEs at low interest rates. The loans will, however, require company directors to add a personal guarantee. Banks will not face any risks.