Smaller firms in Hong Kong caught in the crossfire of the city’s protests and the US-China trade war will have immediate access to funding worth up to HK$35 billion (US$4.5 billion), senior officials have said. Financial Secretary Paul Chan Mo-po and Secretary for Commerce and Economic Development Edward Yau Tang-wah said on Wednesday the “instant help” was for small and medium-sized firms struggling to raise capital, so they could “ride out the storm”. The steps were unveiled at the government headquarters in Admiralty shortly before Chief Executive Carrie Lam Cheng Yuet-ngor announced the total withdrawal of the extradition bill , which she previously declared “dead”. Under the funding proposals, the application process for fresh government cash was being streamlined for smaller companies facing a credit crunch. There were about 40 government funds available with funding worth HK$35 billion up for grabs, Yau said at a press conference after the officials met 300 representatives from small and medium-sized businesses. “The measures aim to help SMEs and micro enterprises, which told us they needed immediate access to fresh capital,” Yau said. “We hope to help them ride out the storm.” The moves were designed to throw a cash lifeline to smaller and even micro enterprises from going under, with restrictions relaxed to allow them to tap into government funds in a timely manner, Chan said. “Many companies are experiencing a credit crunch and need instant help,” he said. Hong Kong leader Carrie Lam to withdraw extradition bill Lam’s full withdrawal of the bill meant she had acceded to one of the five main demands of protesters, who have taken to the streets to vent their anger at the government over the past 13 weeks. Asked about the Hong Kong demonstrations that have become increasingly violent, Chan said: “Stopping violence is our first priority.” He added the protests in and around Hong Kong International Airport had blemished the city’s international image as a travel destination, with tourism arrivals in the final week of August down 45 per cent year on year. Wednesday’s announcement from the economy officials followed a relief package worth HK$19.1 billion (US$2.4 billion) put forward on August 15, as the government downgraded its forecast for the city’s economic growth this year to anywhere between 0 and 1 per cent, from 2-3 per cent previously. Hong Kong dishes out HK$19.1 billion in sweeteners amid gloomy outlook, unrest The new measures are meant to relax the liquidity arrangement of the SME Financing Guarantee Scheme, under which the government provides for a 90 per cent guarantee for loans of up to HK$6 million per case to help business start-ups. Successful applicants would be granted a payment period of five years and are able to repay the interest for one year before making payments on the principal amount. The same arrangement applies to the SME Loan Guarantee Scheme. Chan said the previous requirement of a one-year operation record would also be waived so start-up businesses could be eligible for the funding support. He said the measures would help businesses ease their cash-flow problems amid the rising economic chill. “These measures are mainly aiming at providing liquidity support to SMEs. The various funding schemes are to facilitate the channelling of funding for SMEs in terms of the business environment. We’ll continue to monitor the situation and roll out more measures if necessary,” he said. Yau also promised to streamline the application procedures to offer an easier access to the 40 government funds worth up to HK$35 billion. “We will simplify the procedures and eligibility requirements. For example, in the past, the participants in the Trade Development Council trade fairs would not get funding support. But now these firms will be eligible for government funding,” Yau said. “Also, we will provide advance cash to the successful applications to give them timely help.” Pang Yiu-kai, chairman of the Hong Kong Tourism Board, said from October 1 those who participate in the board’s exhibitions and trade talks would be waived the participation fees until end of March. Shops under the Quality Tourism Services (QTS) Scheme would also be granted a waiver for annual membership renewal fees, and new shops would be asked to only pay half of the registration fees until the end of next September. The Hong Kong General Chamber of Commerce welcomed the new measures to help businesses ride out the recession that is likely to strike the city. “Liquidity is currently a major concern for businesses,” said Aron Harilela, the chamber chairman. “This will greatly help relieve the cash flow problems that many SMEs are facing.” Terence Chiu, HSBC’s head of commercial banking, said the bank would continue to work closely with the Hong Kong Mortgage Corporation and the government to deliver efficient relief measures to businesses in need. “We believe public-private sector collaboration is critical to supporting our SME community,” he said. Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, said it was most important for the government to relax the application requirements for the funding. “The requirements are very stringent and it has been difficult for SMEs to apply for funding. I hope these measures really help firms to easily obtain funding,” he said. Hong Kong edges towards recession as firms struggle to win new business The latest measures include lifting the guarantee level of loans by the government-owned Hong Kong Mortgage Corporation to 90 per cent and the ceiling of loans to HK$6 million. Another measure sees the government offer subsidies upfront for companies attempting to expand into overseas markets, instead of reimbursing them after they made the investments. The announcement came as Hong Kong also continued to be stung by the US-China trade war. Washington’s retaliatory tariffs – 15 per cent on US$300 billion worth of Chinese goods – started in stages on Sunday, with the remainder due to take effect on December 15. It has yet to reveal the implementation date of the 30 per cent tariffs on US$250 billion worth of Chinese goods. China’s levy of 5-10 per cent tariffs on US$75 billion worth of American products took effect on Sunday.