Learn more about our comprehensive legal services.
Advising our clients on different opportunities and challenges of the industry.
Developing a unique culture, which blends traditional client care with modern technology and working practices since 1851.
Stay up to date on the latest news and legal insights.
News & Insights
To provide immediate relief for cash flow pressures faced by corporate borrowers (in particular small and medium sized corporates) during the Covid-19 pandemic, the Hong Kong Monetary Authority (HKMA) together with the Banking Sector SME Lending Corporation Mechanism (SME Lending Mechanism) launched a novel Pre-approved Principal Payment Holiday Scheme (Scheme) on 1 May 2020. The Scheme applies to corporate borrowers that have an annual sales turnover of HK$800 million or less, have had no outstanding loan payments overdue for more than 30 days and are not in the process of liquidation or bankruptcy (Eligible Borrowers). The Scheme is expected to cover more than 80% of all corporate borrowers in Hong Kong.
Under the Scheme, all loan principal payments of Eligible Borrowers falling due within a 6-month period between 1 May 2020 to 31 October 2020 will be pre-approved for deferment. Principal payments of loans (including revolving facilities) will generally be deferred by 6 months. Trade facilities will be deferred by 3 months, due to their short-term nature.
Eligible Borrowers are not required to apply for the Scheme. Following the circular issued by the HKMA in April 2020, participating banks should have started informing Eligible Borrowers about the Scheme, with priority given to customers with principal payments falling due soon after 1 May 2020. Eligible Borrowers are only required to contact the participating bank to confirm the detailed arrangements of the principal payment holiday within 14 days of receipt of the bank’s notice. The Scheme has received support from all 11 major lenders in the SME Lending Mechanism. All authorised institutions are expected to participate in the Scheme.
Subscribe to Publications
Sign up for our regular updates covering the latest legal developments, regulations and case law.
For media enquiries please contact us at email@example.com.
Tel: +852 2825 9211
Click here to share this shortlist.
(It will expire after 30 days.)