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Bank Services: Lending and Finance

As a cosmopolitan city, Hong Kong offers a variety of world-class commercial and legal services that can help mainland enterprises go global more effectively and efficiently. Whether it is in the field of product design, marketing, brand management or arbitration, Hong Kong professionals with their international perspective can provide excellent services to mainland enterprises.

(1)  Bank Services: Lending and Finance

Capital flow is of prime importance for any business operation. Banks in Hong Kong offer comprehensive and wide-ranging lending services that can cater for companies of different sizes. Hong Kong banks are excellent partners for mainland enterprises wishing to go global.

Lending and finance services

Commercial finance, including:

  • Hire purchase and leasing
  • Equipment and fixed assets loans
  • Overdrafts
  • Project finance
  • Short and medium term loans
  • Issue of shares and bonds
  • Working capital loans
  • Receivables finance
  • Profits tax or corporate tax loans

Different banks offer different services to small and medium-sized businesses. Selected services provided by The Bank of East Asia and HSBC are listed below for reference:

The Bank of East Asia

  • Overdrafts
  • Revolving or term loans
  • Receivables finance
  • Mortgage loans
  • Equipment finance
  • Corporate tax loans
  • SME Financing Guarantee Scheme backed by the Hong Kong Mortgage Corporation Limited (total loan amounts of up to HK$12 million)

Documents and other requirements:

  • Audited financial reports for the past 3 years
  • In-house financial reports for the past 6 months
  • Bank statements for the past 6 months
  • Quotation/purchase contract for equipment (if applicable)
  • Articles of association, copy of IDs of company directors/owners, Business Registration Certificate, Certificate of Incorporation


  • Receivables finance
  • Business instalment loan
  • Business integrated account secured credit facility
  • Overdraft
  • Business property financing
  • Equipment finance
  • SME Financing Guarantee Scheme
  • SME Loan Guarantee Scheme

(ii) Trade services and trade finance


  • Trade services before import: The bank issues letter of credit to the exporter and the exporter ships the goods.
  • Import loans: Applications may be made to the bank to cover raw materials or manufactured products. Upon approval, the bank pays the exporter first.
  • Delivery guarantee: Where the goods arrive in Hong Kong before the import documents, the bank can provide a guarantee to the importer to enable him to take delivery from the shipping company. This helps reduce high storage and demurrage fees.


  • Pre-shipment finance: The bank provides finance to an exporter who has received an order to help him pay for raw materials and other production costs.
  • Post-shipment finance: The bank advances funds to the exporter upon presentation of documents under a letter of credit to meet his financial needs after shipment.
  • Non-recourse finance: The bank helps an exporter turn its receivables into cash, in order to help it reduce payment risk related to the issuing bank and the importing country, as well as avoid being affected by fluctuations in interest and exchange rates. 
  • Buy out: For transactions of relatively large amounts or lengthy repayment periods, the bank provides a guarantee to the exporter to protect it from various risks.
  • Credit trade finance and factoring services: An exporter sells the collection rights to its receivables to the bank in exchange for cash. The bank may also provide management services for receivables and collection services.

Criteria for loans and financing

  • Company incorporated in Hong Kong: Generally banks want to develop relationships with clients locally.
  • Currency of loan: Most loans are in HK$ or US$, depending on the purpose of the loan.
  • Loan amount: There is no pre-set limit. If the amount is very large, the bank may arrange for syndicate loans.
  • Evaluation criteria: The factors considered by Hong Kong banks in evaluating loan applications are as follows:
    - Business of the company
    - Financial situation
    - Transparency of the management
    - Capability and integrity
    - Financial strength
    - Financial planning (including cash management, financial control and monitoring, how well the financial plan supports development of the business, etc.)
    - Prospects of the industry
    - Positioning of the company in the industry and market
    - Competitive advantage
    - Relationship with the bank and duration of relationship
  • Services offered by Hong Kong banks in the Chinese mainland:
    - Finance for commerce, industry and financial sectors
    - Trade finance
    - Savings accounts
    - Cash management
    Note: Different banks may offer different services and adopt different evaluation criteria. Investors should make enquiries and seek confirmation from individual banks. The list above is for reference only.
  • Characteristics of Hong Kong banks:
    - Catering specifically for small and medium-sized businesses: For example, some banks provide dedicated offices and personnel to serve small and medium-sized businesses. Some banks even have staff who are China specialists and fluent in Putonghua to serve the Hong Kong branches of mainland enterprises.
    - Comprehensive services and wide choice: In addition to the services mentioned above, some banks also provide cash management, investment/financial planning, insurance and risk management services.
    - Online services: Clients can handle bank matters via the internet at any time. This helps save both time and money.
    - Performance pledges: Banks are committed to providing tailor-made services for individual clients based on an analysis of his financial needs. Quality and efficiency are emphasised.
    - Well-developed lending culture: Banks have clear and well-defined criteria as well as systematic mechanisms for evaluating loan applications. Companies which have long-term relationships with banks may hear the outcome of a loan application within 24 hours or may get pre-approved loan offers.
    - International network: There are many multinational banks in Hong Kong. Clients can easily obtain overseas information and even news about their overseas buyers from these banks.

HKTDC Tips (on loans and financing)

The Hong Kong branch operations of mainland enterprises wishing to obtain loans from Hong Kong banks should pay attention to the following points:

  • Importance of referrals: Mainland enterprises should first establish relationship with the mainland branch offices of Hong Kong banks. After building mutual trust, they can apply to obtain loans in Hong Kong through the referrals of the mainland branch offices of Hong Kong banks.
  • Audit by certified accountants, such as the Big Four accounting firms, will help an enterprise gain trust from the banks. Together with a set of clear and well-documented company accounts, this will be important in applying for loans and financing successfully.
  • Provision of information: To facilitate the banks in evaluating applications objectively, an enterprise should try its best to provide all information required by the banks.
  • Understanding of the loan evaluation systems of banks: As mentioned earlier, Hong Kong banks have clear and well-defined criteria as well as systematic mechanisms for evaluating loan applications. Please refer to the criteria described above for details. However, always make enquiries with individual banks, because different banks may have different criteria for handling applications under different circumstances.
Content provided by Picture: HKTDC Research
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