Title – 100% Loan Guarantee
The 100% Loan Guarantee has begun receiving applications from now till 19 April 2021.
We understand from our contacts at banks that banks are generally welcoming in terms of approval, which is in contrast to before, where it is generally difficult to apply for SME loans if the SMEs are not profitable. 
In fact, according to one of the major banks in HK, a team of 100 staff has already been assigned to the program to speed up the application process.
The turnaround time is expected to be 3-4 weeks from application to draw down. 
The program is essentially a term loan facility of up to $4,000,000 or total amount of employee wages and rents for six months, whichever is lower. 
According to our calculations, this implies $667k per month, on average, in employee wages and rents. If you are paying more than that then the maximum you can borrow is $4m. 
If an enterprise has neither wages nor rents, the calculation can be replaced by half of the maximum monthly net income in 2019.
The government is clear in its intent to primarily help SMEs to pay wages and protect employment. 
A key feature of the program is that eligible enterprises must have suffered at least 30% decline in sales turnover in any month since February 2020 compared with the monthly average of any quarter in 2019.  
Borrowers can opt for interest payments only in the first 12 months, which at the fixed 2.75%, works out to $2.3k monthly repayment for every $1m borrowed. 
We also note that major shareholders will have to give personal guarantees so as to prevent abuse. 
In HK, there are over 300k SMEs. With the government setting aside $50billion, it is expected that more than 12.5k SMEs should benefit.   
Product 
A new 100% guarantee financing solution provided by HKMC Insurance Limited (HKMCI)  
Features
Term loan facility up to HK$4,000,000  
Repayment period up to 3 years
Fixed monthly instalment amount
Interest rate 2.75% p.a.
NO guarantee fee  
Optional principal moratorium for the first 12 months
Eligibility 

Companies operating and registered in Hong Kong
Companies with a valid Business Registration Certificate
Not a listed company, lending institution or the lender’s affiliates

Companies with at least 30% decline in sales turnover since February 2020
Lenders
Bank of China (Hong Kong) Limited
Bank of Communications (Hong Kong) Limited
Chong Hing Bank Limited
DBS Bank (Hong Kong) Limited
Hang Seng Bank Limited
Nanyang Commercial Bank, Ltd. 
OCBC Wing Hang Bank Limited
Standard Chartered Bank (Hong Kong) Limited
The Bank of East Asia, Limited
The Hongkong and Shanghai Banking Corporation Limited

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