The Government Provides Plenty of Support Even During Economic Downturn
Large corporations can probably hold on to their horses even during a downturn, albeit with the measure to preserve positive cash flow. But, what becomes of the small and medium enterprise? The local SMEs in Hong Kong are beginning to lose their grip on their respective cash flow, what more their sustainability. But all hope is not entirely lost. The Hong Kong Government supports for businesses is aplenty. One may need to be wise and prudent of which assistance suits their company best. Let’s get down to the details of how the Hong Kong Government supports for businesses.
Funds for SMEs
SMEs may be the most affected of all business organisations as their trading activities may be focused within a small niche or market share. Fret not; various funding schemes cater to small and medium companies. It includes guarantee for bank loans, export marketing activities sponsorship and SME development project funds. There is also a particular loan guarantee scheme available to help Hong Kong enterprises bridge the gap of liquidity problems during the global financial downturn. Specifically, SMEs whether new applicants or current applicants of the Special Guarantee Scheme can apply for a six months moratorium. The moratorium period is renewable and, recently, the moratorium period is extended until the end of Q1, 2021. The SGS helps SMEs acquire a loan from participating lending institutions to acquire business installations and equipment and working capital needs of general business. In the light of the pandemic, SMEs can now obtain information about the Guarantee Balance via online enquiry.
SMEs looking to export to other markets or amid exporting activities should seek insurance facilities to insure their goods. Exporters must exercise credit risk prudently amid export market fluctuation. The Hong Kong Export Credit Insurance Corporation (ECIC) supports a wide range of insurance facilities for every size of Hong Kong exporter. The fund is necessary to facilitate trading on credit terms with overseas buyers. Ever since March 2016, the ECIC has been offering permanent concessions via its Small Business Policy (SBP). The offers include annual policy fee waiver and premium discount to assist SMEs cut down their operating costs and improve their competitiveness. Besides such recommendations, the ECIC regularly updates its website with the latest developments in the overseas market. The SBP provides for exporting companies with an annual turnover of less than $50million.
Innovation and Technology Adopters
SME companies wishing to utilise innovative technology can do so with various government assistance and funding. There seems to be a specific fund to meet the needs of each stage of business wanting to adopt technology and innovation. For social entrepreneurs, there is the Social Innovation and Entrepreneurship Development Fund (SIE Fund). It aims to support innovative projects in preference for mitigating poverty. Individuals or organisations may approach appointed agents that will design and administer funding schemes. Budding technology entrepreneurs may find it hard to develop their ideas without thinking of operating costs. This is where the Hong Kong Science and Technology Parks Corporation is offering the Incu-Tech/Incu-Bio Programme. The offer is a complete package of assistance with a three-year or four-year incubation that comes with HK$639K and HK$851K financial aid respectively. Entrepreneurs can utilise ready-to-use offices or labs for up to 12 months, rent-free. While creating innovations or new technology, local companies can also apply for a patent application grant. This will inevitably ensure intellectual property rights. Retail companies looking to increase productivity through technology, can use from the Retail Technology Adoption Assistance Scheme for Manpower Demand Management.
Practical Services for SME
If you have been acquiring paid business advice, it is time to go for SUCCESS. It is the acronym for Support and Consultation Centre for SMEs. SUCCESS offers an extensive range of business information, advice and facilities. All free and practical. Besides business advisory, you can also participate in a business matching service provided by the Hong Kong Trade Development Council (HKTDC). It offers customised services to help find potential business partners and an open market in China. Even if you have found a business partner in China or elsewhere, you desire for your products or services to go further. For this, you can opt to promote your products or services via an online promotion platform. Offered by HKTDC, the platform acts as a sourcing platform for the local and overseas buyer to access registered businesses on the platform. There are more services that the HKTDC has to offer to entrepreneurs. Even as a seasoned business person, in tough times like the current downturn, you may need business inspiration and new ideas. The way to do it is to have access to market information. HKTDC website is full of the latest market news, global trade analysis, policies, opportunities and developments. Make the time to find out what you need to know about the market you want to venture.
Every business has its assets. For some, these assets are stockpiles of products and continuous manufacturing. For others, the resources may seem intangible. You think you have exhausted all your assets to sustain your business, but there is possibly more than meets the eye. There is now a service such as the Intellectual Capital Management (ICM) Programme. The programme is available for free and joining the ICM Consultancy will render an ICM Consultant visiting your office to help identify intellectual assets. He or she will assist in planning to exploit such resources in a well and organised manner.
Hong Kong Government supports for business has been unwavering. It will continue to provide resolute support to ensure businesses can stay afloat and sustain jobs. The Hong Kong Government has always been a pro-business government, and the low tax regime seems to be a pull and stay factor for many companies incorporated in Hong Kong. For more information on how to get on with your business, feel free to contact us.