The Hong Kong government offers grants and loan guarantees, including the BUD Fund (up to HK$7 million), TVP (up to HK$600,000), EMF (up to HK$1 million), and SFGS, which guarantees up to 90% of loans.
Major banks like HSBC, Standard Chartered, and DBS provide SME loans with varying interest rates based on business creditworthiness.
The SME funding application process requires checking eligibility, preparing necessary documents, and submitting applications through government portals or banks.
Beyond funding, SMEs can benefit from tax incentives, business incubation programs such as Cyberport (offering up to HK$500,000) and HKSTP (providing up to HK$1.29 million), as well as government-backed market expansion initiatives.
Small and medium-sized enterprises (SMEs) account for 98% of firms in Hong Kong and play an important role in the economy. Many SMEs, meanwhile, struggle to find money for daily operations, innovation, and growth.
Hong Kong provides a range of government funding initiatives, commercial financing choices, and other funding sources to assist SMEs in order for them to expand.
What Is SME Funding?
SME funding refers to financial assistance designed to help small and medium-sized enterprises expand and manage operations. It can come from government grants, loan guarantees, private investors, or alternative financing sources.
Types of SME Funding in Hong Kong
- Government Grants & Loan Guarantees: Non-repayable grants and government-backed loan schemes to support business growth.
- Bank Loans: Traditional SME loans from banks like HSBC, Standard Chartered, and DBS.
- Venture Capital & Angel Investment: Private investors fund startups in exchange for equity.
- Crowdfunding & P2P Lending: Raising capital from individual investors or the public.
Top Government SME Funding Programs
| Funding Scheme | Funding Amount | Best For | Eligibility |
|---|---|---|---|
| BUD Fund | Up to HK$7 million | Overseas expansion, branding | Hong Kong-registered SMEs |
| TVP (Technology Voucher Programme) | Up to HK$600,000 | Technology upgrades | At least 1 year of operation |
| SFGS (SME Financing Guarantee Scheme) | Loan guarantee up to 90% | Working capital, business growth | Apply through banks |
| EMF (SME Export Marketing Fund) | Up to HK$1,000,000 | International marketing | Export-focused SMEs |
| ITF (Innovation and Technology Fund) | Varies | R&D, innovation | Tech-driven businesses |
| Cyberport Incubation Programme | Up to HK$150,000 | Tech startups | Submit a business proposal |
| CreateSmart Initiative (CSI) | Varies | Creative industries | Design, media, digital firms |
Please check the official website of each program for the most up-to-date information
How to Apply for Government Funding
- Check eligibility: Ensure your business meets the funding requirements.
- Prepare documents: Business registration, financial statements, and project proposals.
- Submit application: Apply via government portals (TID, Cyberport, ITC).
- Await approval: Processing times range from 4–12 weeks.
Private and Alternative SME Funding Options
Beyond government grants, SMEs in Hong Kong can access private financing, venture capital, crowdfunding, and microloans to support business growth. These options offer flexibility, faster approval, and larger funding amounts, depending on business needs.
Bank Loans for SMEs
Major banks like HSBC, Standard Chartered, and DBS offer SME loans with competitive interest rates.
- Funding Amount: Varies by bank
- Interest Rates: Varies depending on the bank and the SME's creditworthiness
- Best For: Established SMEs needing working capital or expansion funds
- How to Apply: Directly through banks with financial records and credit history
Venture Capital & Angel Investment
Investors provide capital to high-growth startups in exchange for equity (ownership shares).
- Funding Amount: HK$500,000: HK$50 million
- Best For: Tech startups and fast-scaling businesses
- Key Investors in Hong Kong:
-Alibaba Entrepreneurs Fund
-Gobi Partners
-Hong Kong X-Tech Startup Platform
- How to Apply: Pitch directly to VC firms or through startup incubators
Please note that this is not an exhaustive list, and the VC landscape is constantly evolving.
Crowdfunding & Peer-to-Peer (P2P) Lending
Alternative financing platforms allow SMEs to raise capital from individual investors or the public.
- Equity Crowdfunding: Sell company shares via AngelHub or SeedInvest.
- Reward-Based Crowdfunding: Pre-sell products via Kickstarter or Indiegogo.
- P2P Lending: Borrow from private lenders via WeLend or GoCredit.
Microfinance & Small Business Loans
For SMEs that don’t qualify for traditional bank loans, microfinance schemes and small business loans provide an alternative.
- Funding: Up to HK$300,000
- Best For: Young entrepreneurs (18-35 years old)
- Application: Through The Hong Kong Federation of Youth Groups (HKFYG)
- Funding: Up to HK$2 million
- Best For: SMEs seeking quick expansion capital
- Application: Available through participating banks
Please check with the participating banks for the most up-to-date loan offerings.
Choosing the Right Private Funding Option
| Funding Type | Best For | Funding Range |
|---|---|---|
| Bank Loans | Established SMEs with good credit | Varies |
| Venture Capital | High-growth startups | HK$500,000: HK$50 million |
| Equity Crowdfunding | Startups & product-based businesses | Varies |
| P2P Lending | Small businesses with limited bank access | HK$100,000: HK$2 million |
| Microfinance | Young entrepreneurs & startups | Up to HK$300,000 |
If you need fast capital with fewer restrictions, consider VC funding, P2P lending, or bank loans. For low-risk, non-repayable support, explore government grants.
Step-by-Step Guide to Applying for SME Funding
Once you’ve identified the best funding scheme, follow these simple steps to prepare and submit your application successfully.
Step 1: Check Eligibility
To qualify for funding, your SME must be registered in Hong Kong. Some grants, like the ITF, are industry-specific, while others, such as the TVP, require at least one year of operation. Loan-based schemes also require a good credit history.
Step 2: Prepare Required Documents
Most funding programs require supporting documents to verify eligibility. Be ready with:
- Business registration certificate
- Company financial statements (for loan or grant applications)
- Business proposal or project plan (for BUD Fund, TVP, Cyberport)
- Marketing proof (for SME Export Marketing Fund)
- Bank statements and tax records (for loan applications)
Step 3: Submit the Application
Depending on the funding scheme, applications can be submitted through government portals, banks, or private investment platforms.
| Funding Type | Where to Apply |
|---|---|
| Government Grants (BUD Fund, TVP, EMF) | Trade and Industry Department (TID) Portal |
| Bank Loans & SFGS | Apply through participating banks |
| Venture Capital & Angel Investors | Directly pitch to VC firms & startup incubators |
| Crowdfunding & P2P Lending | Register on AngelHub, Kickstarter, or WeLend |
For Venture Capital and Angel Investors, consider utilizing online platforms such as LinkedIn to scout and approach potential investors.
Step 4: Wait for Approval
Processing times depend on the type of funding. Government grants like TVP, BUD Fund, and EMF typically take 4 to 12 weeks. Bank loans, such as SFGS and BEE Loan, vary by bank. Venture capital and crowdfunding can take several months due to investor due diligence.
Step 5: Compliance & Fund Usage
After approval, SMEs must adhere to reporting and usage guidelines. For grants like TVP and BUD Fund, progress reports are required. Funds must be used as specified and cannot be reallocated for other purposes. Loan recipients, including those under SFGS and microfinance schemes, must ensure timely repayments.
Government Support Beyond Funding
Beyond financial assistance, the Hong Kong government provides business advisory services, tax incentives, and incubation programs to help SMEs grow, expand, and innovate.
Trade and Industry Department (TID): SME Support Services
The TID offers free business advisory services and resources to help SMEs navigate funding opportunities and business development.
- SME Support and Consultation Centre (SUCCESS): Provides guidance on business growth, funding applications, and regulatory compliance.
- SME Link: Offers business networking, industry insights, and trade connections.
- Hong Kong Export Credit Insurance Corporation (HKECIC): Protects SMEs from export trade risks.
Tax Incentives & Financial Relief for SMEs
To ease financial burdens, the government offers tax incentives and salary subsidies for eligible SMEs.
Two-Tiered Profits Tax System:
- First HK$2 million in profits: 8.25% tax rate (instead of 16.5%).
- Profits above HK$2 million: Standard 16.5% tax applies.
Businesses investing in research & innovation can claim tax deductions on qualifying expenses.
Business Incubation & Startup Support
The Hong Kong government offers incubation programs to help startups grow by providing funding, mentorship, office space, and business development support.
- Cyberport Incubation Programme: Offers up to HK$500,000 in funding, along with office space, networking opportunities, and mentorship. Ideal for tech startups.
- Hong Kong Science and Technology Parks (HKSTP) Incubation Programme: Provides up to HK$1.29 million in funding, lab facilities, R&D support, and corporate partnerships, making it a great fit for tech and innovation-driven businesses.
- CreateSmart Initiative (CSI): Designed for the creative industry, including design, digital media, and animation. It offers funding for creative projects, networking events, and training programs.
Business Matching & Market Expansion Programs
For SMEs looking to expand globally, the government offers trade fairs and networking opportunities.
- StartmeupHK Festival: A startup-focused event connecting SMEs with investors and partners.
- Hong Kong Trade Development Council (HKTDC): Organizes international trade fairs and business matching services.
- BUD Fund Expansion Assistance: Supports businesses entering Mainland China and ASEAN markets.
Even if you don’t need funding, take advantage of free advisory services, networking, and tax incentives to boost your business.
Conclusion
Securing the right funding is crucial for SMEs in Hong Kong to grow, innovate, and compete in the market. Whether you need financing for business expansion, technology upgrades, or international marketing, there are various government and private funding options available.
For SMEs looking beyond government grants, private funding sources such as bank loans, venture capital, and crowdfunding offer flexible financing alternatives.
Need help? Reach out to Air Corporate today.
Information is based on data available as of February 2025, and is subject to change. Always verify the most current details with official sources.
