Hong Kong SME Funding Guide 2025

Small and medium-sized enterprises (SMEs) are the driving force behind Hong Kong’s economy, accounting for over 98% of all businesses and providing vital support to innovation, employment, and economic growth. However, many SMEs face challenges in securing sufficient funding to sustain operations, upgrade technology, or expand into new markets. To support these needs, Hong Kong offers a robust ecosystem of financial assistance from government grants and loan guarantees like the BUD Fund, TVP, EMF, and SFGS, to bank financing and private investment opportunities. In this blog, we’ll explore the key SME funding options available in 2025, including how Hong Kong businesses can access the right combination of grants, loans, and alternative financing to strengthen their financial position and drive long-term growth.

Key Takeaways

Diverse Funding Ecosystem

Hong Kong SMEs can access government grants (BUD Fund, TVP, EMF), loan guarantees (SFGS), bank loans, venture capital, crowdfunding, and microfinance.

Government Grants & Loan Guarantees

Hong Kong SMEs can access non-repayable grants—up to HK$7M under BUD and HK$1M under EMF—as well as government-backed loan guarantees via SFGS to support expansion and international marketing.

Private & Bank Financing

Established SMEs can secure flexible working capital, expansion loans, or trade finance from banks such as HSBC, Standard Chartered, and DBS.

Alternative Financing Options

Startups and microbusinesses benefit from venture capital, angel investment, crowdfunding, and P2P lending for strategic support.

Strategic Alignment & Compliance

SMEs match funding programs with business goals and comply with post-approval reporting to maximise funding success.

What Is SME Funding?

SME funding refers to financial support provided to small and medium-sized enterprises to help them operate, grow, and innovate. It serves as a crucial lifeline for businesses that need capital for activities such as expanding overseas, upgrading technology, hiring staff, or managing daily cash flow. In Hong Kong, SME funding is a core element of the city’s business ecosystem, designed to strengthen entrepreneurship and ensure long-term economic resilience.

There are several types of SME funding sources available in Hong Kong:

However, many Hong Kong SMEs face challenges in securing these funds. Common obstacles include maintaining healthy cash flow while waiting for approval, meeting strict eligibility criteria, and preparing comprehensive financial documentation. Additionally, some SMEs struggle to identify which funding program best aligns with their business goals.

Overview of SME Funding Options in Hong Kong

Hong Kong offers a wide variety of SME funding options to help small and medium-sized enterprises sustain growth, innovate, and expand locally or abroad. These funding avenues can generally be divided into three main categories — Government Grants and Loan Guarantees, Private and Bank Financing, and Alternative and Venture Funding Sources. Each comes with distinct advantages, funding amounts, and eligibility requirements depending on the stage and goals of your business.

1. Government Grants and Loan Guarantees

The Hong Kong government provides numerous non-repayable grants and loan guarantee schemes to ease the financial burden of SMEs and stimulate business innovation, export growth, and digital transformation.

• BUD Fund – Offers up to HK$7 million to help SMEs expand into Mainland China and ASEAN markets.
• Technology Voucher Programme (TVP) – Provides up to HK$600,000 for technology upgrades and process automation.
• SME Export Marketing Fund (EMF) – Grants up to HK$1 million for international marketing and trade promotion.
• SME Financing Guarantee Scheme (SFGS) – Offers up to 90% loan guarantees for working capital and business expansion.

These programs are ideal for established Hong Kong-registered SMEs seeking structured, low-risk financial support with clear compliance requirements.

2. Private and Bank Financing

For SMEs needing flexible, larger-scale funding, bank loans and private financing remain a key option. Major banks such as HSBC, Standard Chartered, and DBS offer tailored SME financing solutions with competitive interest rates based on business creditworthiness.

Common bank loan options include:

• Working Capital Loans – For daily operations and short-term cash flow needs.
• Equipment or Expansion Loans – For scaling production or opening new locations.
• Trade Finance and Invoice Factoring – For managing export/import transactions efficiently.

While these loans typically require a strong financial history and collateral, they provide faster access to substantial funding for established businesses.

3. Alternative and Venture Funding Sources

Beyond traditional grants and bank loans, Hong Kong’s entrepreneurial ecosystem supports alternative and equity-based funding options, particularly for startups and innovative SMEs.

• Venture Capital & Angel Investment – Investors such as Alibaba Entrepreneurs Fund and Gobi Partners provide between HK$500,000 to HK$50 million in exchange for equity in high-growth startups.
  
• Crowdfunding Platforms – Sites like AngelHub and Kickstarter enable SMEs to raise funds directly from the public through product pre-sales or equity campaigns.
  
• Peer-to-Peer (P2P) Lending & Microfinance – Platforms like WeLend or the YBHK Microfinance Scheme offer loans from HK$100,000 to HK$300,000, ideal for young entrepreneurs and small businesses with limited banking access.

These funding methods provide agility, faster approvals, and access to a broad investor network although they often come with higher risks or equity trade-offs.

Quick Comparison: SME Funding Options in Hong Kong (2025)

Top Government Funding Schemes For Hong Kong SMEs 

The Hong Kong government continues to support SMEs through a variety of funding and loan guarantee programs aimed at driving innovation, global expansion, and financial stability. Below is an updated overview of the top government funding schemes in 2025, including key features, funding amounts, and application details for Hong Kong SMEs.

1. BUD Fund (Dedicated Fund on Branding, Upgrading, and Domestic Sales)

Funding: Up to HK$7 million
Best for: Market expansion in Mainland China and ASEAN

The BUD Fund helps Hong Kong-registered SMEs enhance competitiveness and explore business opportunities in Mainland China and ASEAN markets. It supports activities such as brand development, upgrading operations, and promoting domestic sales.

Key Eligibility:

• The applicant must be a non-listed Hong Kong-registered company.
• Eligible projects must target markets under the Mainland Programme or ASEAN Programme.
• Each enterprise can apply for up to 70 approved projects, with total cumulative funding capped at HK$7 million.

Application Notes:

• Submit applications through the BUD Fund Online Application System.
• Required documents include business registration, financial statements, and a detailed project plan.
• Funding is released on a reimbursement basis after project completion and verification.

2. Technology Voucher Programme (TVP) – Closed to new applications

Funding: Up to HK$600,000
Best for: Technology system upgrades and digital transformation

The HKSAR Government ceased accepting new TVP applications after December 31, 2024. Applications submitted before that date continue to be processed in 2025. For technology upgrades in 2025, consider the ITF–Enterprise Support Scheme (ESS) (up to HK$10M on a 1:1 match; IP retained by the recipient).

Key Eligibility:

• Hong Kong-registered business operating for at least 1 year.
• Not listed on any stock exchange and not a government subvented organization.

Application Notes:

• Applications can be made online via the Innovation and Technology Commission (ITC) Portal.
• A maximum of six projects per enterprise is allowed, with the government funding up to 75% of the total project cost.
• Typical processing time ranges from 6 to 12 weeks after submission.

3. SME Export Marketing Fund (EMF)

Funding: Up to HK$1 million
Best for: Overseas trade fairs, e-commerce promotions, and export marketing activities

The SME Export Marketing Fund (EMF) assists SMEs in expanding their international presence through participation in exhibitions, trade missions, and digital marketing campaigns targeting overseas markets.

Application Process Highlights:

• Administered by the Trade and Industry Department (TID).
• Each eligible enterprise can receive up to HK$100,000 per project, with a cumulative funding ceiling of HK$1 million.
• Activities eligible for funding include trade shows, advertising in international media, and online marketing campaigns.
• Applications can be submitted before or within 60 days after the completion of the activity.

4. SME Financing Guarantee Scheme (SFGS)

Loan Guarantee: Up to 90%
Best for: Working capital and operational financing

The SME Financing Guarantee Scheme (SFGS) provides loan guarantees to SMEs seeking business expansion or to stabilize cash flow. Administered by the Hong Kong Mortgage Corporation Insurance Limited (HKMCI), it helps reduce financing risks for participating banks. SFGS (90% Guarantee Product) — open until end-March 2026; check lenders for current fee subsidies and any principal moratorium options announced for late-2025 loans.

Eligibility and Participating Banks:

• Available to all Hong Kong-registered SMEs with substantive business operations.
• Applicants must apply through participating banks such as HSBC, Standard Chartered, DBS, and Bank of China (HK).
• The government guarantees up to 90% of approved loans, depending on the financing type and risk level.
• Funding can be used for working capital, equipment purchases, or business expansion.

5. Innovation and Technology Fund (ITF)

Funding: Varies based on project scale
Best for: Research, development, and technology innovation projects

The Innovation and Technology Fund (ITF) supports enterprises engaged in research and development (R&D) and encourages the adoption of innovation-driven solutions. It aims to enhance Hong Kong’s competitiveness as a global innovation hub.

Key Details:

• Administered by the Innovation and Technology Commission (ITC).
• Open to Hong Kong-registered companies conducting or partnering in R&D projects.
• Funding covers manpower, equipment, prototype development, and IP-related expenses.
• Common sub-programmes include the Enterprise Support Scheme (ESS) and Partnership Research Programme (PRP).

6. Creative & Tech Incubation Support

How To Apply For Government SME Funding

Applying for SME funding in Hong Kong requires careful planning, accurate documentation, and a clear understanding of each scheme’s requirements. Below is a step-by-step guide to help business owners navigate the process effectively and increase their chances of approval.

Step 1: Confirm Eligibility Criteria

Before applying, ensure your business meets the basic eligibility conditions. Most Hong Kong SME funding schemes require your company to be registered in Hong Kong, actively operating, and not listed on any stock exchange. Certain programs, such as the TVP, require at least one year of operation, while others, like the BUD Fund, focus on businesses expanding into Mainland China or ASEAN markets. Always review the latest eligibility criteria on official government portals before proceeding.

Step 2: Prepare Required Documentation

Gather all supporting materials to demonstrate your business’s eligibility and project feasibility. Typically, you’ll need:

• Business Registration Certificate and valid BR copy
• Audited financial statements or management accounts
• Business or project proposal outlining objectives, scope, and budget
• Proof of business operations, such as invoices or contracts
• Bank statements or tax records (for loan-related schemes)

Ensure your proposal clearly explains how the funding will contribute to your business growth or technology upgrade — this significantly strengthens your application.

Step 3: Submit via Official Portals or Partner Banks

Applications for most government funding schemes can be submitted online:

• BUD Fund, TVP, and EMF: Apply through the Trade and Industry Department (TID) portal.
• SFGS loans: Submit through participating banks such as HSBC, Standard Chartered, or DBS.
• ITF and incubation programs (Cyberport, HKSTP): Apply through their respective official websites.

Each program has different submission formats and evaluation criteria, so always follow the provided guidelines carefully.

Step 4: Wait for Assessment and Approval (4–12 Weeks)

Once submitted, your application will undergo assessment by the relevant department or financial institution. Processing times vary depending on the program, typically 4 to 12 weeks for grants like the BUD Fund or TVP, and slightly longer for R&D-related funding such as ITF. During this period, you may be asked to provide clarifications or supplementary documents.

Step 5: Follow Compliance and Reporting Requirements

After receiving approval, businesses must comply with all funding terms and conditions. This includes using the funds strictly for the approved purposes, submitting progress reports, and retaining proper accounting records. For loan-based schemes like SFGS, SMEs must also maintain regular repayments and financial reporting to the bank.

Accurate bookkeeping and a clear, results-oriented project proposal can significantly boost your approval chances. Consider using a cloud accounting platform like Xero to streamline financial recordkeeping and ensure full compliance throughout the funding process.

Private and Bank Financing Options For SMEs

While government funding schemes provide valuable non-repayable support, many Hong Kong SMEs also rely on bank loans and private financing options for faster access to capital and greater flexibility. These alternatives are ideal for businesses seeking to expand, stabilise cash flow, or seize new opportunities without waiting for lengthy grant approvals.

1. SME Loans from Major Banks (HSBC, DBS, Standard Chartered)

Hong Kong’s leading banks including HSBC, DBS, and Standard Chartered offer a wide range of SME loan products tailored to different business needs, from working capital to expansion financing.

Key Features and Funding Range:

• Loan amount: Typically ranges from HK$100,000 to over HK$5 million, depending on business size and financial strength.
• Interest rates: Vary based on creditworthiness, collateral, and loan tenure — generally between Prime Rate ± 2–5% or linked to HIBOR.
• Loan types: Include term loans, revolving credit, and trade financing solutions to support imports, exports, and daily operations.
• Tenure: Up to 5 years, with flexible repayment schedules.

How to Apply 

Applications can be made directly via each bank’s online portal or SME banking center. Approval typically requires:

• A valid Hong Kong Business Registration Certificate
• Audited financial statements or bank statements from the past 6–12 months
• Company background and business plan (for larger loan amounts)
• Good credit record and repayment history

Some banks also participate in the SME Financing Guarantee Scheme (SFGS), offering government-backed guarantees of up to 90% of the loan amount significantly improving approval chances for smaller businesses or startups with limited collateral.

2. Microfinance & Quick Expansion Loans

For SMEs or entrepreneurs who may not qualify for traditional bank loans, Hong Kong offers microfinance programs and fast-track loan options to support early-stage or rapidly growing businesses.

YBHK Microfinance Scheme (Young Business Hong Kong):

• HKMA Microfinance Scheme (via participating banks): loans up to HK$300,000, tenor up to 5 years; principal holiday and capped rates available.
• YBHK (HKFYG): as of Oct 2, 2025, interest-free loans up to HK$200,000 for AI projects (HK$180,000 for others), plus mentorship.
• Use the bank-run scheme if you need a larger cap; use YBHK if you’re a young founder seeking interest-free support and guidance. 

Biz Expands Easy (BEE) Loan:

• Funding: Up to HK$2 million
• Best for: SMEs seeking quick expansion capital or cash flow support
• Features: Streamlined application process, minimal documentation, and faster approval times
• Application: Available through participating banks and financial institutions

These programs provide accessible funding options for SMEs that need immediate capital injections to scale operations, launch new products, or manage short-term liquidity challenges.

Alternative SME Financing Options

While government grants and bank loans remain the most common routes for Hong Kong SMEs, many growing businesses are now turning to alternative financing options for greater flexibility, faster access to funds, and stronger investor partnerships. Two of the most popular alternatives include venture capital and angel investment as well as crowdfunding and peer-to-peer (P2P) lending platforms which are ideal for startups and SMEs seeking innovative growth financing.

1. Venture Capital & Angel Investment

Venture Capital (VC) and Angel Investment are private funding options where investors provide capital in exchange for equity (ownership shares) in your business. These investors are typically drawn to high-growth startups and innovative companies with scalable business models.

Funding Range: HK$500,000 – HK$50 million

Key Players in Hong Kong:

• Alibaba Entrepreneurs Fund: Supports Hong Kong startups through investment and acceleration programs.
• Gobi Partners: Focuses on technology-driven businesses across the GBA and Asia.
• Hong Kong X-Tech Startup Platform: Backed by Hong Kong’s leading universities and entrepreneurs, supporting tech innovation.

How to Pitch to Investors:
To secure VC or angel funding, SMEs must present a clear and compelling business case:

1. Strong Business Plan: Define your market opportunity, revenue model, and competitive advantage.
2. Scalability: Demonstrate growth potential and a clear path to profitability.
3. Investor Alignment: Approach investors with experience in your sector for strategic synergy.

Keep in mind that VC and angel funding come with equity trade-offs meaning investors gain partial ownership and influence over business decisions. However, this also provides valuable mentorship, networking opportunities, and long-term strategic support that can accelerate your company’s success.

2. Crowdfunding & P2P Lending Platforms

For SMEs and startups that prefer not to give up equity, crowdfunding and peer-to-peer (P2P) lending offer accessible, community-driven financing alternatives.

Types of Crowdfunding:

• Equity Crowdfunding: Raise capital by offering company shares to investors (e.g., AngelHub).
• Reward-Based Crowdfunding: Pre-sell products or services to fund development (e.g., Kickstarter).
• Peer-to-Peer (P2P) Lending: Borrow funds directly from individual lenders without going through banks (e.g., WeLend).

Examples in Hong Kong:

• AngelHub: Licensed equity crowdfunding platform connecting startups with accredited investors.
• Kickstarter: Popular for creative, tech, and consumer product campaigns.
• WeLend: Offers fast and flexible online personal and SME loans.

Benefits:

• Fast access to funding with lower entry barriers.
• Builds brand visibility and market validation early in the business lifecycle.
• Diversifies financing beyond banks or government channels.

Risks and Considerations:

• Some platforms charge fees or require minimum fundraising targets.
• P2P loans involve repayment obligations with interest.
• Public exposure of ideas can invite competition.

Before launching a crowdfunding or P2P campaign, SMEs should ensure their financial documentation, business goals, and marketing message are well-prepared. Partnering with professional advisors like FastLane Group can help you craft an investor-ready pitch deck, optimize financial reporting, and select the best funding route for your business stage.

Government Support Beyond Funding

Hong Kong’s government not only provides financial assistance to SMEs but also offers a comprehensive ecosystem of advisory services, tax incentives, and incubation programs to help businesses grow, innovate, and expand internationally. Leveraging these resources can give SMEs a competitive edge beyond just capital.

1. Business Advisory & Support Programs

To guide SMEs through business development and funding opportunities, the government offers specialized advisory platforms:

• TID’s SUCCESS Centre and SME Link: These initiatives provide free consultation on funding applications, regulatory compliance, and business strategy. They also offer networking opportunities and practical resources for daily operations.
• Hong Kong Trade Development Council (HKTDC): HKTDC organizes international trade fairs, business matching sessions, and market intelligence services, helping SMEs explore new markets and connect with overseas partners.

These programs are especially useful for SMEs aiming to expand their market reach, improve operational efficiency, or navigate complex business regulations.

2. Tax Incentives for SMEs

Hong Kong’s tax framework is designed to ease financial pressure on SMEs while encouraging innovation:

• Two-Tiered Profits Tax System: The first HK$2 million of profits is taxed at 8.25%, instead of the standard 16.5%, providing immediate cash flow relief for smaller businesses.
• R&D and Innovation Deductions: Companies investing in research and development, technology upgrades, or innovative projects can claim tax deductions on qualifying expenses, incentivizing long-term business growth.

By optimising tax strategies, SMEs can free up resources for expansion, staff development, or digital transformation projects.

3. Incubation and Market Expansion Initiatives

Hong Kong also provides incubation programs and market expansion initiatives that help startups and SMEs accelerate growth:

• StartmeupHK Festival: Connects startups with investors, mentors, and industry partners through events, pitching sessions, and networking opportunities.
  
• Cyberport Incubation Programme: Offers up to HK$500,000 in funding, office space, mentorship, and networking support, ideal for tech startups.
  
• Hong Kong Science and Technology Parks (HKSTP) Incubation Programme: Provides up to HK$1.29 million, lab facilities, R&D support, and corporate partnerships, perfect for innovation-driven companies.
  
• BUD Fund Expansion Assistance: Supports SMEs expanding into Mainland China and ASEAN markets by funding branding, marketing, and market-entry strategies.

Even if your SME does not currently require direct funding, tapping into advisory services, incubation programs, and market expansion initiatives can enhance business visibility, credibility, and long-term growth potential. These combined resources make Hong Kong a highly supportive environment for SMEs, ensuring that businesses have both the financial and strategic support needed to thrive locally and internationally.

Choosing The Right Funding Option For Your Business

Selecting the most suitable funding option is critical for Hong Kong SMEs to ensure optimal growth, cash flow management, and strategic development. The choice depends on your business stage, operational focus, and expansion plans. Below is a decision framework to guide your funding strategy:

Decision Framework for SME Funding

• Startups & High-Growth Ventures → Venture Capital / Incubation
  Ideal for early-stage or tech-driven businesses that require substantial capital to scale. Incubation programs such as Cyberport and HKSTP provide mentorship, networking, and seed funding, while venture capital from firms like Alibaba Entrepreneurs Fund or Gobi Partners can deliver HK$500,000–HK$50 million in equity investment.
  
• Digitalisation & Technology Upgrades → TVP (Technology Voucher Programme)
  SMEs looking to adopt or upgrade technology systems can benefit from TVP funding of up to HK$600,000, supporting software, hardware, or IT consultancy projects to enhance operational efficiency.
  
• Export-Oriented SMEs → EMF / BUD Fund
  Companies aiming to expand into international markets can leverage the SME Export Marketing Fund (EMF) for marketing campaigns (up to HK$1 million) or the BUD Fund for branding and overseas expansion (up to HK$7 million).
  
• Cash Flow & Working Capital Needs → SFGS / Bank Loans
  SMEs with immediate operational funding requirements can access SME Financing Guarantee Scheme (SFGS) backed loans or traditional bank loans from HSBC, Standard Chartered, and DBS, ensuring liquidity and stability for day-to-day operations.

Comparing SME Funding Types

Align your funding choice with your immediate business goals. Startups may prioritise growth and equity funding, while established SMEs might focus on operational support or market expansion. Using the right funding source strategically can maximize both financial efficiency and business impact.

Common Mistakes To Avoid In Funding Applications

Successfully securing SME funding in Hong Kong requires careful planning and attention to detail. Many SMEs encounter setbacks due to avoidable errors during the application process. Here are the most common mistakes and how to steer clear of them:

1. Incomplete Documentation or Unclear Business Plan

A major reason funding applications are rejected is incomplete or inconsistent paperwork. This includes missing financial statements, business registration certificates, or project proposals. An unclear or vague business plan can also undermine your credibility with both government agencies and private investors.

Tip: Prepare a detailed and structured business plan that clearly outlines your objectives, funding needs, projected outcomes, and growth strategy. Double-check all supporting documents before submission.

2. Misalignment Between Funding Purpose and Program Objectives

Each funding scheme has specific goals for example, the Technology Voucher Programme (TVP) is designed for digitalisation projects, while the BUD Fund targets overseas expansion. Applying for the wrong program or failing to demonstrate alignment between your project and the fund’s objectives can result in delays or rejection.

Tip: Research the eligibility criteria and intended outcomes of each funding option. Tailor your proposal to clearly show how your project meets the fund’s goals.

3. Ignoring Post-Approval Compliance or Fund Usage Guidelines

Even after approval, SMEs must adhere strictly to reporting requirements and fund usage rules. Misusing grant funds or failing to submit progress reports can lead to penalties or repayment obligations, and may affect eligibility for future funding.

Tip: Keep meticulous records of how funds are spent, follow reporting deadlines, and ensure all expenditures comply with the grant or loan terms. Consider setting up internal monitoring procedures for accountability.

Conclusion

Hong Kong offers a diverse SME funding ecosystem, ranging from government grants and loan guarantees to private financing options such as bank loans, venture capital, and crowdfunding. Successfully leveraging these resources requires aligning your funding strategy with long-term business goals, whether for technology upgrades, international expansion, or working capital needs. By exploring both public and private financing avenues and carefully matching programs to your business objectives, SMEs can unlock growth opportunities, enhance competitiveness, and drive sustainable success in the dynamic Hong Kong market.