A total of 20 banks have so far participated in a $3.5 billion Government Loan Guarantee Scheme and will accept applications from next Monday (May 5) until July 31.
The scheme aims at providing short-term cash flow relief to certain industries which are experiencing serious cash-flow problems as a result of the significant business downturn since the outbreak of the Severe Acute Respiratory Syndrome.
It will also help preserve jobs as loans under the Scheme must be used to pay staff salaries.
The following businesses are eligible for applying for loans under the scheme:
* Restaurants and hotels: restaurants, fast food shops and other eating and drinking places licensed by the Food and Environmental Hygiene Department, as well as hotels and guesthouses licensed by the Home Affairs Department.
* Travel agents and tourist coach operators: travel agents licensed by the Registrar of Travel Agents, and tourist coach operators licensed by the Transport Department.
* Retail: all businesses with fixed premises and primarily engaged in the businesses of selling tangible goods/products to the general public as end-users or consumers rather than for resale purposes. Establishments must have more than half of their turnover derived from sale of such tangible goods/products.
* Cinemas and Karaokes: All cinemas licensed under the Places of Public Entertainment Ordinance and karaoke establishments regulated under the Karaoke Establishment Ordinance.
Except for restaurants, all companies under the above mentioned industry categories should have been operating and holding a valid Business Registration Certificate for one year in order to qualify. For restaurants, the qualifying operation period is six months.
Applicants are expected to provide evidence to show that they have suffered from at least 30 percent decline in sales receipt in April this year as compared with the monthly average of the previous three months.
The guarantee ceiling for each application will be:
* $1 million for restaurants and hotels
(per business premises)
* $500,000 for travel agents and tourist coach operators
(per business premises)
* $300,000 for retail businesses, cinemas and karaoke
establishments (per business premises)
As the loans will be solely used for payment of staff salaries, applicants will have to produce a statement of the employers' contribution to the Mandatory Provident Fund Scheme or Occupational Retirement Schemes as proof of employment relations and the size of workforce.
Each application will require a personal guarantee from the establishment's shareholder. If there is more than one shareholder, a joint and several guarantee for the full amount of the loan will be required from shareholders holding a total of 90 per cent or more equity in the business. Such guarantors should be the beneficial owners of the business.
Once the loan is approved by the lending institution, all drawings shall be paid to the respective payroll accounts of the applicant's employees and/or by way of money orders/cheques drawn in favour of the relevant employees of the applicant. In the latter event, proceeds of the drawing will only be released after presentation by the applicant of cheques payable to employees which the lending institution will then pay into the employees' respective accounts.
The application form and a list of participating banks have been uploaded to the Labour Department's homepage at www.info.gov.hk/labour. The list will be updated from time to time. Also uploaded to this website and that of the Mandatory Provident Fund Authority (www.mpfahk.org) is a standard request form for the applicants to make requests on their respective trustees to provide authenticated employers' contribution statements for making contributions to the Mandatory Provident Fund Schemes or Occupational Retirement Schemes for the months of January to March 2003. The standard request forms can also be obtained from the 10 Labour Relations Division branch offices.
Following are the participating banks:
* Bank of China (Hong Kong)
* Bank of Communications, Hong Kong Branch
* BNP PARIBAS, Hong Kong
* Chekiang First Bank Limited
* CITIBANK N.A.
* CITIC Ka Wah Bank Limited
* Dah Sing Bank Limited
* Dao Heng Bank Limited
* DBS Kwong On Bank Limited
* Hang Seng Bank Limited
* ICBC (Asia)
* International Bank of Asia Limited
* Liu Chong Hing Bank Limited
* Nanyang Commercial Bank Ltd
* Overseas Trust Bank, Limited
* Shanghai Commercial Bank Limited
* Standard Chartered Bank
* The Bank of East Asia, Limited
* The Hong Kong and Shanghai Banking Corporation Limited
* Wing Lung Bank Limited
Further enquiries about the loan, application procedures and documentation required can be made at the participating banks. For general enquiries, please contact the Labour Department's Telephone Enquiry Service at 2717 1771.
A leaflet outlining the scheme will be available for collection from May 5 at Labour Department's offices and District offices of the Home Affairs Department. Radio and TV announcements of public interest will also be on air from the same day to publicise the scheme.
End/Friday, May 2, 2003
NNNN
