Whether you’re a business founder, entrepreneur or a start-up company in Hong Kong and are looking to expand further, there are several ways to secure business funding.
Business Grants in Hong Kong
Hong Kong grants are the cheapest way to finance a start-up company, but these paperwork-heavy processes can often be headache inducing. Few grants are awarded, and for those that are, the funding usually must go toward a specific purpose and can take more than a year to be released.
One of the main grants that is available from the Hong Kong government is the Innovation and Technology Fund (ITF). This grant is available to help level-up the technology in a business. This can be useful to help fund the expensive tech that a business might require.
The Social Innovation and Entrepreneurship Development Fund (SIE Fund) is a fund that is designed as a type of mentoring fund that addresses poverty and social exclusion, from the initial idea and seed phase of the business cycle to the point where a business is looking to scale up.
The SME Loan Guarantee Scheme (SGS) is designed to help secure business loans to small and medium sized businesses.
There are also some government schemes that are available to businesses that deal with export to foreign countries.
Business Loans from Hong Kong Banks
A second option for funding is loans, which are usually granted to well-established businesses that can provide security to borrow against and can prove a prior history of credit, stability and financial growth. These criteria make it hard for a start-up business to qualify, even if it’s only for a small loan. Add to that bank and credit companies’ reluctance to lend money in today’s struggling economy, the approval for high-risk loans is becoming more improbable.
Equity Funding in Hong Kong
A third source of business funding is equity. Business angels, or private investors based in Hong Kong, can provide start-up equity, called seed capital. For young companies, private equity investors are a great source for securing initial financing. Business angels usually provide seed capital in the range from $100,000 Hong Kong Dollar (HKD) to HK$400,000, plus business angels offer their business expertise and contacts to help their investments grow.
Once the business is off the ground and proves high-earning potential, then entrepreneurs can seek venture capital, another form of equity in which a group of investors usually pool money in the HK$1,000,000 plus range for shares and a stake in the company’s operations.
Angel Investors in Hong Kong
This is where the Hong Kong Angel Investment Network can help. Entrepreneurs can sign-up to put details of their business idea or project and pitch to business angels and investors based in Hong Kong and wider afield. Since the Angel Investment network is a global enterprise both entrepreneurs and investors can find partners close to home in Hong Kong, but also from around the rest of the world. So, whether you’re based in Hong Kong, Singapore, elsewhere in China or overseas if you’re looking to do business from or to Hong Kong and are looking for business ideas to invest in, or for funding from business angels, then the Angel Investment Network should be your first destination.