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Debt Financing for Companies in Hong Kong

Debt Financing for Companies in Hong Kong

Finance sources for companies in Hong Kong

Investors in Hong Kong who are just starting their business in the city can use debt financing for companies. This is the equivalent of borrowing a loan from a bank in Hong Kong, other companies or financial institutions in order to initiate or support a business. 

This is a good solution for those investors who want to open their own business and maintain control over their company in Hong KongThe loan will have a certain amount of interest expenses and will be payable in a pre-established amount of time, as per the initial loan agreement.

The advantages of debt financing in Hong Kong

An advantage of debt financing is that the owner of the company in Hong Kong maintains full control of his legal entity as the bank or financial institution will not be involved in the management of the company. Companies can even deduct interest payments as part of business expenses. Our agents can help you with detailed information about this practice and other tax minimization options in Hong Kong.

Debt financing can be adequate for companies that need a significant amount of capital to boost the growth of their business. This financing method may involve some risks, especially if the predicted growth is not the same as the actual growth. In this case, the company will lose some assets if it is unable to pay its loans.

Types of loans for companies in Hong Kong

A large number of banks and financial institutions in Hong Kong offer corporate financing. The types of loans include:

term loans: over a period of 5 to 7 years, with various interest rates and a repayment period of 1-7 years;

overdraft: the extension of the credit; might have slightly larger interest rates than term loans;

trade financing;

receivable financing;

export financing;

mortgages.

The terms of the loan, the interest rates and the repayment period are set by the financing institution or the bank. Our company registration agents in Hong Kong can help you search for the best type of corporate financing for your company. Loan approvals will largely be based on individual cases, this is why you should seek professional advice and know what your options are in terms of debt financing

Contact our company registration consultants in Hong Kong for more advice and assistance for opening a company.